Tata Consultancy Services (TCS), part of the Tata Group, is a global leader in IT services and consulting, helping businesses around the world navigate the complexities of the digital age. Based in Mumbai, India, TCS works with clients across industries like banking, healthcare, retail, and telecom, delivering tailored, technology-driven solutions.
| TCS Q2 Results-Earning release |
| Dividend Announcement |
| Dividend History in FY25 |
| Past Dividend Trends |
| Stock Performance This Week (As of October 10, 2024) |
TCS Quarter2 Results-Earning release
TCS released its financial results for the second quarter of FY25 on the same day as the dividend announcement. The company reported a 5% year-on-year (YoY) growth in net profit, which stood at ₹11,909 crore, compared to ₹11,342 crore in the same quarter last year. Revenues also saw an increase, growing 7.6% YoY to ₹64,259 crore.
TCS Q2 Results Comparison
| Metric | Q2 FY25 | Q2 FY24 | YoY Growth |
|---|---|---|---|
| Revenue | ₹64,259 crore | ₹59,692 crore | 7.6% |
| Net Profit | ₹11,909 crore | ₹11,342 crore | 5% |
| Operating Margin | ~24% | ~25% | Slight Decrease |
| Earnings Per Share (EPS) | Data not disclosed yet | Data not disclosed yet | Marginal increase |
TCS’s CEO, K. Krithivasan, commented on the performance, noting cautious trends in certain sectors, but overall a strong performance in key markets. The company’s largest vertical, Banking, Financial Services, and Insurance (BFSI), showed signs of recovery, while other growth markets also contributed positively to the quarterly results.
TCS Dividend Announcement
On October 10, 2024, TCS announced its second interim dividend for the fiscal year 2025. The company’s board declared a dividend of ₹10 per share. Shareholders who are on the company’s record as of the record date, October 18, 2024, will be eligible for this payout. The dividend will be credited to eligible shareholders on November 5, 2024.
This interim dividend is part of TCS’s consistent strategy to return significant cash to its shareholders. TCS has a long-standing dividend policy of distributing 80-100% of its free cash flow (FCF) to shareholders, a practice that has cemented the company’s reputation as a reliable dividend payer.
Dividend History in FY25
The latest announcement marks the second interim dividend in the current fiscal year. Earlier, during Q1 FY25, TCS had declared a dividend of ₹10 per share, making the total interim dividend so far for FY25 ₹20 per share. This is in line with the company’s past practices, where it announces multiple interim dividends throughout the fiscal year, culminating in a final dividend post-Q4 results.
In FY24, TCS had declared a total dividend of ₹73 per share, showcasing its commitment to maintaining strong returns for its investors. This included multiple interim dividends and a final dividend announced with its Q4 results. Moreover, the company conducted a significant share buyback program worth ₹17,000 crore in FY24, further demonstrating its shareholder-friendly policies.
Past Dividend Trends
TCS has been one of the most consistent dividend payers among Indian IT companies, thanks to its high free cash flow and stable earnings. For FY24, the total shareholder payout, including dividends and share buybacks, amounted to a substantial ₹46,223 crore. Over the past few years, TCS has returned significant value to its shareholders. For instance:
- FY24: Total dividend of ₹73 per share.
- FY23: ₹115 per share, with a total payout of ₹33,306 crore.
- FY22: ₹43 per share.
- FY21: ₹38 per share.
These figures demonstrate the company’s commitment to distributing a large portion of its earnings back to its shareholders, even during periods of market volatility.
Stock Performance This Week (As of October 10, 2024)
As of this week, TCS stock has shown resilience amidst broader market fluctuations. Leading up to the dividend announcement, TCS shares have remained relatively stable, reflecting investor confidence in the company’s consistent financial performance and its shareholder return policies. On the day of the dividend announcement, October 10, 2024, the stock showed minimal volatility, trading in a tight range on the Bombay Stock Exchange (BSE).
The broader market sentiment has been influenced by mixed global cues, with concerns about global interest rates and inflation affecting tech stocks worldwide. However, TCS Quarter2 Results and robust dividend payout have helped keep the stock buoyant. Over the past week, TCS shares have seen a slight uptick of around 1.5%, suggesting that investors are factoring in both the dividend payout and the company’s healthy financial position.
As of October 10, 2024, TCS shares are trading at around ₹3,500 per share, TCS Quarter2 Results shows expectations of moderate growth as the dividend record date approaches.