3 days ago
FY25 dividend payouts: Cash-rich BFSI and IT companies dominate
While it is raining dividends in India Inc., the shower has been far from even. Longtime dividend powerhouses—banking, financial services, and insurance (BFSI) and information technology (IT) companies tightened their grip on the dividend charts, reaffirming their status as consistent cash-returning machines.
In contrast, several traditional and growth-oriented sectors including logistics, media, and retail remained on the fringes, underlining a widening gulf in dividend distribution across industries.
Leading sectors
A Mint analysis of 496 BSE 500 companies based on Capitaline data covering audited, unaudited, and proposed dividends revealed that BFSI alone accounted for 21.4% of total dividend payouts in FY25, followed closely by IT & ITeS at 20.5%, meaning they together accounting for more than 40% of all payouts. Meanwhile, industries such as logistics and media contributed less than 1% each, signaling a stark divergence in corporate priorities.
'The shift towards BFSI and IT leading dividend payouts is structural, not cyclical," said Anirudh Garg, managing partner at INVasset."While both sectors deliver over 40% of total dividends, BFSI offers stability through steady earnings, whereas IT's higher payouts reflect limited growth avenues. For income investors, BFSI provides consistency while IT requires more selective picking."
'Private sector companies—especially in BFSI—have shown robust balance sheets and a clear capital allocation framework," noted Saptarshi Pandey, a stock market strategist and founder of Investeem India. 'These firms don't need to reinvest aggressively, and their predictable cash flows make them ideal dividend leaders."
On the flip side, Trivesh D, chief operating officer at Tradejini, said, 'Private players with leaner payout policies and stronger growth trajectories might turn out to be better long-term bets."
Metals, FMCG hold steady
Beyond BFSI and IT, metals & mining contributed 11.7% to these bounties, with oil & gas and FMCG accounting for 9.2% and 8.9% respectively. However, the oil & gas sector showed visible signs of pressure—dividend payouts dropped 28% year-on-year, echoing a steep 32% decline in net profits. Once a dependable dividend contributor, the sector appears to be retreating amid tightening cash flows.
In contrast, metals & mining and FMCG companies turned in a strong performance with dividend payouts rising 28.4% and 12.6%, respectively, closely tracking robust profit growth of 20.3% and 35.3%.
At the other end of the spectrum were the so-called marginal sectors—industries that together accounted for less than 2% of the FY25 dividend pool. Logistics, media & entertainment, textiles, travel & hospitality, retail, and consumer durables all posted payouts that barely moved the needle.
Growth divide
Dividend generosity was muted in several of these segments despite notable profit growth. Logistics firms, for instance, slashed dividends by a staggering 76% even as profits grew 20.5%. Media and entertainment companies reported a 171% surge in earnings but increased dividends by just 9%.
In contrast, retail firms saw payouts grow 71.1% year-on-year, supported by a modest 14% rise in profits. Travel and hospitality players raised their payouts by 59% on the back of a 20% jump in profits.
However, consumer durables and textiles painted a mixed picture. Dividend payouts in the consumer durables sector rose 5%, in line with a 13.6% rise in profits. Meanwhile, textile firms defied earnings pressure: despite a sharp 27% decline in profits, they still increased their dividends by 21.2%.
'Despite strong profit growth in FY25, sectors like media, travel, and retail contributed less than 1% to the dividend pool primarily because companies in these segments are prioritising reinvestment over distribution. Many are in growth or recovery phases, post-pandemic, focusing on scaling operations, expanding digital infrastructure, or improving margins," said Pandey.
This is the concluding part of a four-part series of data stories on the dividends declared by India Inc. Read the first part here, second part here and third part here.
