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Increment to shareholders
Fifty companies have increased the dividend payout ratio
in the latest financial year
The board of directors of Infosys, the
countrys leading software exporter, has decided to change its dividend policy. The company has increased the dividend payout ratio to up to 40% of the post tax profit from
fiscal ended 31 March 2014 (FY 2014). Earlier, the software firm had a policy of paying dividend up to 30% of profit after tax.
Infosys declared total dividend of Rs 63
per share for FY 2014 as against Rs 42 paid
in FY 2013. This included interim dividend
of Rs 20 (FY 2013 interim dividend of Rs
15) and final dividend of Rs 43 per share
(FY 2013 Rs 27). The company reported
earning per share (EPS) of Rs 186.3 for FY
2014 and Rs 164.9 for FY 2013. According
to Infosys, the payout ratio has been increased to enhance the return to the shareholders. A higher payout ratio will negatively
impact its earning per share (EPS) by approximately Rs 1.5 due to lower non-operating income.
The software major is often blamed for
unnecessarily hoarding excess cash with no
visibility over its usage. The management is
considered conservative and reluctant to go
for mega acquisitions unlike its peers such
as Tata Consultancy Services and Wipro.
Due to its aversion to undertake the inorganic route, the company continues to
19
InFocus
and payout ratio and reporting improved
bottomline performance in the latest TTM
period were picked.
These 50 companies have handed out
increments to their shareholders. This could
be a testimony to their strong cash-flows.
It also could be an attempt to drain out
excess cash, which, in turn, could improve
their return ratios such as return on equity
(ROE). Each of these companies could be
explored for their fundamental attributes
and growth outlook. If they manage to improve upon their financials over the medium to long term, these companies can
offer steady earning to their shareholders
in the form of stable dividends.
Among the shortlisted companies, Poly
Medicure and Atul Auto are two notable
examples of how dividend yield can improve
along with robust financial performance.
Medical accessories and devices maker Poly
Medicure paid dividend of Rs 4 per share,
or 40% on face value of Rs 10. The company was trading in the range of Rs 10 to Rs
25 in the period September 2008 to June
2009. Those who bought the stock in in this
period must be reaping rich benefits. Over
the last five years that is between FY 2008
and FY 2013, the turnover increased 2.9
times and profit 3.2 times.
Similarly, manufacturer of passenger and
commercial three-wheelers Atul Auto, paid
Over the last five years, Atul Autos net sales was up 4.5 times and profit 20 times
22
InFocus
payout ratio and dividend in percentage
terms as well.
Investors should take due care of special dividends, which is largely a one-time
affair. This is also what the hybrid approach
suggests. Maker of power equipments
Alstom India announced a dividend of Rs
14 per share for FY 2014. This included
special dividend of Rs 4 per share on account of sale of the transport business. The
company had paid dividend of Rs 10, or
100% on face value of Rs 10, in the previous financial year that is FY 2013.
In January 2014, Alstom approved hiring off its transportation system undertaking to a group company Alstom Transport
India on a slump-sale basis. Slump-sale refers to sale at a lumpsum amount without
valuing each individual assets and liabilities.
As per the agreement signed in March 2014,
the transfer of the business became effective from 31 March 2014. The profit of Rs
116.9 crore earned on the disposal of the
business has been treated as Exceptional
item in the profit and loss account.
Sasken Communication Technologies had declared interim dividend of Rs 3
per share for the quarter ended 31 March
2014 and final dividend of Rs 1.5 per share
having face value of Rs 10 each for FY 2014.
The aggregate dividend will be Rs 32 per
share for FY 2014. This will include interim dividend of Rs 5.5, special dividend
of Rs 25 and final dividend of Rs 1.5 per
share. The special dividend was paid as the
company had completed 25 years in businesses. The software services and prod-
Wyeth paid Rs 145 per share on Rs 10 share as interim dividend in the December 2013 quarter
Rewarding investors
Companies with market cap greater than Rs 100 crore and reporting increase in dividend payout ratio and dividend in percentage
COMPANY
CMP MARKET
CAP
(Rs) (Rs cr)
768.0
1146.6
LOW
(Rs)
368.0
52-WEEK
P/E
HIGH RATIO
(Rs)
831.0
14.3
P/BV DIVIDEND
YIELD
(%)
11.25
TTM CHG IN
ENDED TTM PAT
(%)
YEAR
END
DIVIDEND (%)
LATEST PREV.
YEAR YEAR
PAYOUT (%)
LATEST PREV.
YEAR YEAR
9.11
201403
10.5
201306
700.0
235
156.8
104.2
16.2
AIA Engineering
603.3
5688.7
275.0
622.0
19.5
4.01
0.67
201312
34.9
201303
200.0
150
18.5
Ajanta Pharma
992.7
3490.3
475.3
1086.1
31.9
8.87
0.42
201312
82.2
201303
125.0
75
13.4
11.6
409.9
7000.2
207.8
460.0
20.2
6.61
0.61
201312
21.6
201303
252.0
189
15.4
15.4
891.1 12396.3
802.0
1096.2
43.2
4.51
0.62
201312
10.9
201303
110.0
80
27.2
26.6
Arvind
183.2
4729.9
65.0
197.1
13.7
2.39
0.90
201312
40.3
201303
16.5
10
17.7
6.0
Asian Paints
505.2 48454.0
376.4
560.0
41.0
14.32
0.91
201312
5.4
201303
460.0
400
40.7
40.0
556.0
890.2
512.0
801.0
9.2
1.89
0.36
201312
113.3
201303
20.0
15
6.8
3.9
67.8
554.5
30.2
69.5
10.9
2.30
1.18
201403
41.1
201303
40.0
35
18.1
17.8
384.5
421.8
145.0
411.8
14.6
5.69
1.56
201312
28.5
201303
60.0
50
26.5
24.4
23
InFocus
COMPANY
CMP MARKET
CAP
(Rs) (Rs cr)
LOW
(Rs)
52-WEEK
P/E
HIGH RATIO
(Rs)
P/BV DIVIDEND
YIELD
(%)
TTM CHG IN
ENDED TTM PAT
(%)
YEAR
END
DIVIDEND (%)
LATEST PREV.
YEAR YEAR
PAYOUT (%)
LATEST PREV.
YEAR YEAR
Axis Bank
1519.2 71500.9
764.0
1555.0
11.3
1.86
1.18
201403
20.0
201303
180.0
160
16.6
16.1
Bajaj Finance
1874.3
9397.7
965.5
1890.0
13.4
2.79
0.79
201312
30.8
201303
150.0
120
12.9
12.4
198.1
439.8
171.0
219.9
12.9
6.54
5.55
201312
10.8
201303
110.0
100
78.5
78.1
240.7
8340.3
185.4
256.3
35.1
8.76
0.75
201312
8.5
201303
90.0
70
30.0
28.1
Cairn India
334.9 63996.0
273.4
371.7
5.2
1.11
3.43
201403
3.1
201403
125
115
19.2
18.2
239.4
490.5
113.0
257.4
6.5
1.08
1.67
201403
39.9
201303
40.0
30
15.5
14.4
CARE
789.0
2288.1
415.1
874.9
24.1
5.09
2.50
201312
16.5
201303
200.0
100
54.8
27.7
50.5
297.4
18.6
59.8
7.0
1.00
3.68
201312
54.4
201303
20.0
15
36.9
16.1
257.5
1287.3
117.2
286.1
20.8
4.90
1.18
201312
36.6
201303
152.0
110
24.0
19.9
1380.0 18318.8
905.0
1459.0
32.2
7.33
1.09
201312
21.1
201303
750.0
650
35.0
34.2
527.2
579.9
160.0
589.8
28.0
2.33
0.57
201312
212.2
201303
60.0
40
16.0
13.6
Fiem Industries
417.4
499.2
179.1
441.6
18.5
3.24
0.96
201312
48.3
201303
40.0
30
17.8
17.5
Glenmark Pharmaceuticals
604.4 16393.1
479.5
612.2
24.6
5.93
0.39
201312
11.3
201303
237.2 46.62
10.3
2.7
Gujarat Fluorochemicals
318.9
3504.2
190.0
334.9
12.1
1.11
1.16
201312
40.9
201303
370.0
350
7.4
5.0
270.0
2907.9
100.0
325.0
34.7
22.44
0.63
201312
102.3
201303
170.0
130
43.9
40.3
1869.0
ICRA
IndusInd Bank
Infosys
1869.0
938.1
1975.0
25.5
5.51
1.18
201312
25.7
201303
220.0
200
40.0
39.5
479.0 25186.4
318.0
530.6
17.9
2.91
0.62
201403
32.7
201303
30.0
22
15.2
13.1
3177.2 182447.5
26.7
2222.6
3847.2
18.2
4.10
1.98
201403
13.0
201403
1260.0
840
36.0
Infotech Enterprises
314.5
3521.1
157.0
389.0
13.2
2.22
1.43
201403
15.1
201303
90.0
50
23.9
19.0
Ipca Laboratories
838.7 10584.4
506.4
906.9
33.6
6.81
0.48
201312
25.0
201303
200.0
160
16.0
14.9
20.9
J&K Bank
1679.8
8143.4
995.0
1793.2
8.0
1.67
2.98
201312
16.7
201303
500.0
335
23.9
631.1
4348.0
231.0
657.6
20.1
12.59
0.50
201312
79.3
201303
160.0
40
17.6
9.6
1246.0
1536.3
685.0
1288.0
24.5
6.05
1.40
201312
27.3
201303
175.0
170
43.2
43.0
10.2
KRBL
57.8
1360.0
19.4
63.9
6.4
1.64
1.40
201312
37.8
201303
80.0
30
14.7
Liberty Phosphate
173.7
250.8
75.5
226.0
0.7
1.52
1.73
201312
696.2
201303
30.0
18
14.0
4.9
269.4
2948.3
240.4
330.0
11.4
2.12
2.60
201312
17.6
201303
140.0
120
28.5
23.5
MOIL
253.4
4257.1
182.4
272.0
9.1
1.54
2.17
201312
11.7
201303
55.0
50
22.2
21.2
Natco Pharma
799.0
2642.1
390.0
877.0
29.4
4.12
0.47
201312
22.6
201303
40.0
30
19.7
16.4
Page Industries
5811.7
6480.0
3570.0
6750.0
45.6
30.35
0.86
201312
34.2
201303
500.0
370
53.9
49.6
Phoenix Mills
248.4
3598.1
185.0
293.0
47.1
2.05
0.89
201312
21.8
201303
110.0
100
42.0
35.5
Pidilite Industries
318.1 16303.2
219.7
340.0
35.3
9.87
0.82
201312
12.6
201303
260.0
190
33.4
31.4
Poly Medicure
459.3
1011.7
221.5
515.0
43.0
9.00
0.44
201312
105.3
201303
40.0
30
19.6
17.7
Relaxo Footwears
303.0
1818.0
110.0
315.9
31.7
8.48
0.13
201312
14.3
201303
40.0
30
5.4
4.5
Shilpa Medicare
458.6
1687.7
136.2
469.0
25.3
5.27
0.19
201312
21.9
201303
65.0
45
6.8
5.4
Swaraj Engines
721.5
896.1
431.0
772.8
13.2
4.27
4.57
201403
20.9
201303
330.0
130
84.6
32.2
2189.4 428837.8
1364.0
2384.2
23.6
8.72
1.46
201403
37.7
201403
3200.0
2200
33.9
32.3
26.2
TCS
Torrent Pharmaceuticals
577.4
9769.9
334.5
607.7
17.6
6.87
1.99
201312
66.5
201303
460.0
170
48.4
Wim Plast
620.8
372.5
293.1
664.8
12.2
2.99
1.29
201312
9.7
201303
80.0
60
17.5
16.2
Wipro
522.0 128771.5
315.3
610.5
16.5
3.95
1.42
201403
17.5
201303
350.0
300
31.0
27.5
275.0
146.7
283.0
28.3
2.20
1.27
201312
35.8
201303
35.0
30
52.7
34.4
533.2
CMP (current market price) is closing as on 30 April 2014. P/E: Price to earning ratio. P/BV: Price to book value. Consolidated financials considered wherever available.
Change in TTM RPAT: Trailing 12 months reported profit after tax over the corresponding previous period.
Companies are arranged in alphabetical order
Source: Capitaline Databases
24