Shares of Tata Consultancy Services (TCS) hit a fresh 52-week low on Friday, a day ahead of its dividend record date. Should you invest?
TCS Dividend: Shares of Tata Consultancy Services (TCS) hit a fresh 52-week low on Friday, a day ahead of its dividend record date. At 12:25, the IT stock hit a fresh low of Rs 1,959.95 on the BSE. The scrip is down over 10 per cent in the past 6 sessions after reporting disappointing results for the April-June quarter.
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While announcing its earnings for the first quarter ended June 2022, India’s top IT company Tata Consultancy Services’ (TCS) board also declared an interim dividend of Rs 8 per equity share of Re 1 each company. The record date of TCS’ interim dividend has been set on July 16, 2022.
“The interim dividend shall be paid on Wednesday, August 3, 2022, to the equity shareholders of the company, whose names appear on the register of members of the company or in the records of the depositories as beneficial owners of the shares as on Saturday, July 16, 2022, which is the record date fixed for the purpose,” TCS had informed in an exchange filing.
A dividend means the distribution of surplus from the profits by a listed company to its shareholders. India’s top IT company TCS has been returning cash to shareholders through interim dividends every quarter, final dividends at the year-end and an occasional special dividend.
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In FY22, TCS’ total dividend stood at Rs 43 per equity share. In the annual report dated June 2, it was revealed that for the full year, the company’s shareholder pay-out stood at Rs 38,010 crore up by 12.2 per cent year-on-year (YoY). The pay-out included dividend including the unpaid dividend, buyback and taxes.
Last week, the Tata Group company reported over 5 per cent rise in Q1FY23 net profit from a year earlier, missing analysts’ estimate, as rising employee costs squeezed earnings even as demand remained robust. The Mumbai-based company’s net profit rose to Rs 9,478 crore in the quarter ended June.
Should you Invest?
Shweta Madnani, analyst, Choice Equities, said: “We have an Outperform rating with a Target Price of Rs 3,993. This quarter’s results were disappointing, revenue growth was lower than anticipated, but order intake & outlook for the medium-term remains strong. Margins were lower in Q1 as the full impact of the annual wage hike was reflected. In the next few quarters, we expect the margins to inch upwards.”
Punit Patni, equity research analyst, Swastika Investmart Ltd., said: “We are positive about TCS Ltd. from a long-term perspective despite the disappointing Q1 FY23 results. The company reported healthy growth this quarter but was disappointed on the margin front because of the rising subcontracting costs, wage inflation, and supply-side issues. However, the management commentary has been cautiously optimistic considering the current scorching inflation in the American and European regions, which could put some pressure on IT spending in the short term. Nevertheless, the long-term demand growth drivers are still intact and the current correction provides a good entry point.”
DISCLAIMER: The views and investment tips by experts in this News18.com report are their own and not those of the website or its management. Users are advised to check with certified experts before taking any investment decisions.
