Tata Sons set for record dividend income in FY23

 

Tata Consultancy Services (TCS), being the cash cow of Tata Group, helped in bringing a big payout, which may in turn help in earning a record high dividend worth Rs.33,350 crore from listed companies for the financial year 2023. In the previous financial year, it was about Rs.14529 crore. About Rs.30500 crore would go to Tata Sons, and the rest would go to the profit and loss account for the financial year 2024. This is done due to the allocation of 80 per cent of the dividend pay-out for the financial year 2023 by TCS, which was given before the end of the financial year through three quarterly interim instalments. Whereas Tata's other groups, like Tata Steel and Tata Motors, paid dividends after the end of the fiscal year, TCS is expected to give a dividend income of Rs30418 crore in the financial year 2023. After ICICI Bank, which reported a net profit of Rs.34026 crore in the recent financial year, these events may make Tata Sons the seventh most profitable company in the country in the financial year 2023.

It is concluded that Tata Sons' dividend income is said to be its net profit. Apart from the dividend, the group earns income in the form of interest from its treasury operations. About 96 percent of Tata Group revenues are constituted from Tata Consultancy Services (TCS) dividend proceeds. Analysts are expecting high revenues and profits in fiscal year 2023. In the financial year 2022, Tata Sons reported revenues of Rs. 24177 crore and a net profit of Rs.17171. About Rs.18000 crore was spent by TCS on share buybacks in March 2022. Tata Steel is the second contributor to Tata Sons dividend pay in the financial year 2023, which was about Rs.1427 crore, followed by Tata Motors. The contributions of Tata Elxsi are not likely to be included in the group's dividend income for the financial year 2023. In the financial year 2022, an equity dividend of Rs.265 crore was paid by Tata Elxsi to its shareholders. From which about Rs.112 crore had accrued to Tata Sons. Tata Sons owns 42.22 per cent of Tata Elxsi. Tata Sons directly owns 14 of the 26 listed firms in the group. The group's revenues and profits are dependent on the profitability of Tata Consultancy Service (TCS). The high dividend pay-out may result in opportunities for Tata Sons to invest in various sunrise sectors such as e-commerce and loss-making legacy businesses such as aviation and broadcasting.