India Inc cut back on dividends in FY24 despite record profit

Despite a boom in corporate profitability, listed firms in FY24 reduced dividend payout, which was down 4.7 per cent year-on-year (Y-o-Y) to 4.03 trillion from the record high of ₹4.23 trillion in FY23.

- KRISHNA KANT

In comparison, combined net profits (adjusted for exceptional gains and losses) of all companies in the Business Standard sample were up 29.9 per cent Y-o-Y to an all-time high of ₹14.75 trillion last financial year from the 11.36 trillion in FY23.

A cut in dividend payout last financial year came after three years of high double-digit growth, mirroring the boom in corporate profits in the post-pandemic period.

Dividend payout by listed firms in the sample had increased at a compound annual growth rate (CAGR) of 29.5 per cent between FY20 and FY23. Annual payout jumped from 1.95 trillion in FY20 to 4.23 trillion in FY23. For comparison, corporate net profits (adjusted for exceptional gains and losses) grew at a CAGR of 33.7 per cent between FY20 and FY23.

In contrast, equity dividend payout by companies was struggling to grow in the pre-pandemic period. Payout by listed companies in the sample had grown at a CAGR of just 3 per cent between FY17 and FY20. It had increased from 1.78 trillion in FY17 to ₹1.95 trillion in FY20.