HCL Tech Dividend, Q3 Results: After 2500% Dividends, More Rewards Await For Investors, What To Expect?

Dividend King Stock: IT giant, HCL Technologies is among the top dividend-paying stocks in the sector. The company holds a consistent track record for rewarding its shareholders with hefty dividends. And after paying huge dividends to the tune of 2500% in 2023, more incentives are incoming. HCL Tech is set to announce its Q3 results report card on January 12, and alongside, it will also declare a fourth interim dividend for the financial year 2023-24. HCL has already fixed a record date.

As per the regulatory filing, HCL Tech said that a meeting of the Board of Directors of the Company is scheduled to be held on January 12, 2024, to consider amongst others:

- Unaudited financial Results of the Company for the quarter and nine months ending December 31, 2023.

- Payment of 4th Interim dividend for the financial year 2023-24.

Further, the company said the record date for determining the entitlement of shareholders for payment of the aforesaid interim dividend shall be January 20, 2024, subject to the approval of the interim dividend by the Board of Directors.

For FY24, the last time HCL Tech turned ex-dividend was in October 2023 for a third interim dividend of 600% amounting to Rs 12 per share, while it turned ex-dividend in July for a second interim dividend up to 500% valuing to Rs 10 per share. The first interim dividend payout was of 900% amounting to Rs 18 per share, and HCL turned ex-dividend for this in April.

So far, in FY24, HCL Tech paid dividends up to 2000% amounting to Rs 40 per share to its shareholders. The details of the fourth interim dividends will be keenly watched.

On January 8th, ahead of Q3 results, HCL Tech shares are trading in green. In the early trade, the stock is up nearly a per cent and touched an intraday high of Rs 1,447.45 apiece with a market cap of more than Rs 3,91,500 crore. Currently, the stock has a dividend yield of 3.35%.

What to expect on January 12 from HCL Tech?

For HCL Tech's Q3, Kotak Institutional Equities said, "December is a seasonally strong quarter for the company. We expect 4.3% QoQ growth, led by (1) US$50 mn incremental revenues from the Verizon contract, contributing 1.5% to growth, (2) US$30 mn incremental revenues from ASAP acquisition, driving 1% incremental contribution and (3) US$70 mn incremental revenues from products business (2.3% contribution) from seasonal strength in products."

Further, the brokerage's note added, "Net new deal wins to moderate to US$2-3 bn range after a strong Verizon-led showing in the September 2023 quarter. We expect the EBIT margin to increase by 50 bps, largely driven by a 120 bps contribution from the products business, offset to some extent by wage revision and the lower margin of the Verizon contract. The company is likely to retain revenue growth guidance of 5-6% overall and 4-5% on an organic basis. EBIT margin guidance band of 18-19% to remain unchanged."

Kotak expects investors to focus on - (1) the outcome of the annual client budgeting exercise including recovery in discretionary spending, (2) profitability dynamics of the Verizon mega-deal, (3) factors that underpin management confidence to achieve FY2024 growth and guidance and (4) can the company grow in line/or ahead with peers in a strong discretionary spending environment.

Currently, Kotak has recommended 'ADD' HCL Tech shares for a target price of Rs 1,600 apiece.

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