In this article, we discuss 10 Indian tech stocks that pay dividends. You can skip our detailed analysis of India’s tech industry and dividend investment strategy, and go directly to read 5 Indian Tech Stocks that Pay Dividends.
The tech industry in India is thriving. According to Bloomberg, the industry contributes nearly 9% to the national GDP, coming through as the most important economic sector. In addition to this, The National Association of Software and Service Companies mentioned that India’s tech sector revenue will reach $227 billion this year, up from $103 billion in 2021.
After the pandemic, many high-profile tech companies in India launched their IPOs and also raised a record amount of capital from private equity firms. According to a report published by CNBC, private equity investments in India reached $28.2 billion this year, up 200% from last year. Rajan Anandan, managing director at Sequoia Capital India, said that the Indian tech ecosystem is growing steadily and the analyst expects several promising IPOs in 2022 as well. This shows that global investors are eyeing the region for future investments. Moreover, some well-established tech companies that offer dividends are more enticing to shareholders, especially during periods of market volatility.
After a brutal start to 2022, investors around the world are prioritizing dividend stocks to ensure regular streams of income. Usually, tech companies use their profits for growth objectives rather than offering dividends. Some of the major tech companies like Amazon.com, Inc. (NASDAQ:AMZN), Meta Platforms, Inc. (NASDAQ:META), and Alphabet Inc. (NASDAQ:GOOG) do not pay dividends to shareholders and use their capital for reinvestments and acquisitions. However, this article will focus on 10 Indian tech stocks that pay dividends.
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Our Methodology:
For this list, we shortlisted major Indian tech companies that pay dividends and have attractive yields. The majority of these companies are listed on Indian National Stock Exchange and are ranked according to their dividend yields, as recorded on August 15.
10 Indian Tech Stocks that Pay Dividends
10. Polycab India Limited (NSE:POLYCAB.NS)
Dividend Yield as of August 15: 0.58%
Polycab India Limited (NSE:POLYCAB.NS) is an Indian manufacturing company that specializes in the production of cables and wires. In addition to this, the company also deals in a wide range of consumer electrical products.
In fiscal Q1 2023, Polycab India Limited (NSE:POLYCAB.NS) reported a revenue of INR 27.3 billion, up 48% from the same period last year. The company’s export business contributed 6.7% to consolidated revenue. Its revenue from fast-moving electrical goods came in at over INR 3 billion, showing a 59% year-over-year growth.
Polycab India Limited (NSE:POLYCAB.NS) has been generating solid returns for shareholders over the years, gaining 25.4% in the past year. The stock’s 5-year returns came in at 274.4%, as of the close of August 14.
Polycab India Limited (NSE:POLYCAB.NS) pays a quarterly dividend of INR 3.49 per share and has a yield of 0.58%, as of August 15. The company has steadily raised its dividends and its 5-year dividend CAGR stands at 60.1%.
9. Birlasoft Limited (NSE:BSOFT.NS)
Dividend Yield as of August 15: 1.32%
Birlasoft Limited (NSE:BSOFT.NS) is a Pune-based software company that provides services across the banking, manufacturing, insurance, media, and healthcare industries. As of August, the company has over 12,200 professionals working to build sustainable communities.
In Q1 2023, Birlasoft Limited (NSE:BSOFT.NS) reported $148.6 million in revenues, up 15.8% from the same period last year. The company ended the quarter with $152.5 million available in cash and cash equivalents and has total assets worth over $438 million. Its Manufacturing segment represented 46.7% of its gross revenue, while the Energy segment accounted for 14.3%. In the past five years, Birlasoft Limited (NSE:BSOFT.NS) delivered a 381.7% return to shareholders, as of the market close of August 14.
Birlasoft Limited (NSE:BSOFT.NS) pays an annual dividend of INR 3 per share, with a dividend yield of 1.32%, as of August 15. In May, the company’s management also approved a buyback of nearly 7.8 million equity shares at an average share price of INR 500.
8. Tech Mahindra Limited (NSE:TECHM.NS)
Dividend Yield as of August 15: 1.41%
Tech Mahindra Limited (NSE:TECHM.NS) is a multinational information technology company. It has built pioneering systems, processes, and solutions for enterprise clients across the globe.
In Q1 2023, Tech Mahindra Limited (NSE:TECHM.NS) reported revenue of $1.6 billion, up from 41.38 billion in the same period last year. The company ended the quarter with over $1.1 billion available in cash and cash equivalents and its gross profit came in at $459 million. It generated nearly $72 million in free cash flow during the quarter, with conversion to profit after tax at 50.2%. In the last five years, Tech Mahindra Limited (NSE:TECHM.NS) delivered 148.8% returns to shareholders, as of the close of August 14.
Tech Mahindra Limited (NSE:TECHM.NS) is one of the strongest dividend players in the Indian market, offering dividends to shareholders since 2002. It offers a quarterly dividend of INR 3.76 per share, with a dividend yield of 1.41%, as recorded on August 15. The company’s dividend has grown at a CAGR of 37.9% in the last five years.
7. Mphasis Limited (NSE:MPHASIS.NS)
Dividend Yield as of August 15: 1.92%
Mphasis Limited (NSE:MPHASIS.NS) is a Bengaluru-based Indian multinational information technology services and consulting company. The company provides services in infrastructure technology and applications outsourcing.
In Q1 2023, Mphasis Limited (NSE:MPHASIS.NS)’s total revenue came in at INR 34 billion, up from INR 32.7 billion in the previous quarter. In FY22, the company reported strong free cash flow generation, with its operating cash flow standing at INR 17 billion. Moreover, its free cash flow during the year was recorded at nearly INR 16 billion.
Mphasis Limited (NSE:MPHASIS.NS) has been paying dividends to shareholders since 2001. The company offers an annual dividend of INR 46 per share, with a dividend yield of 1.92%, as of August 15.
6. Zensar Technologies Limited (NSE:ZENSARTECH.NS)
Dividend Yield as of August 15: 1.93%
Zensar Technologies Limited (NSE:ZENSARTECH.NS) is an IT service management company that mainly specializes in technology-related consulting. The company also designs and markets digital products for high-growth companies.
In Q1 2023, Zensar Technologies Limited (NSE:ZENSARTECH.NS) generated $155.9 million in revenue, up 26.3% from the same period last year. The US represented 70.9% of the company’s gross revenue while Europe accounted for 18.1%. The company ended the quarter with $163.5 million available in cash. In the past five years, Zensar Technologies Limited (NSE:ZENSARTECH.NS) gained 46.2%, as of the market close of August 14.
As shares of major tech stocks like Amazon.com, Inc. (NASDAQ:AMZN), Meta Platforms, Inc. (NASDAQ:META), and Alphabet Inc. (NASDAQ:GOOG) plummeted in 2022 so far, Zensar Technologies Limited (NSE:ZENSARTECH.NS) is also down 56.3% year-to-date.
Zensar Technologies Limited (NSE:ZENSARTECH.NS) pays a quarterly dividend of INR 1.12 per share and has a dividend yield of 1.93%, as recorded on August 15.
Click to continue reading and see 5 Indian Tech Stocks that Pay Dividends.
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Disclosure. None. 10 Indian Tech Stocks that Pay Dividends is originally published on Insider Monkey.
