Friday, June 26, 2009

India Inc Dividend Payout decreasing

The historical data available on the NSE website for Dividend Yield of S&P CNX Nifty and S&P CNX 500 shows that even though the EPS of S&P CNX Nifty increased by around three times between April 2003 and June 2009; from INR 74 to around INR 220; the dividend payout increased only by twice from INR 28.45 to INR 55.15. The data is almost similar for S&P CNX 500. The EPS of S&P CNX 500 increased from INR 54.5 to INR 190, i.e. 3.5 times, the dividend payout only increased by two times i.e. from INR 23.15 to INR 45. Even if you consider the impact of DDT (Dividend Distribution Tax), the dividends would have increased to INR 64.9 and INR 52.95 for S&P CNX Nifty and S&P CNX 500 respectively. Are Indian companies becoming stingy?
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