In this article, we discuss 10 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.
5. Infosys Limited (NYSE:INFY)
Dividend Yield as of August 15: 2.01%
Infosys Limited (NYSE:INFY) is an Indian multinational information technology company that provides outsourcing services to its consumers.
In Q1 2023, Infosys Limited (NYSE:INFY) reported revenue of $4.44 billion, showing a 17.5% year-over-year growth and also beating estimates by $180 million. The company ended the quarter with over $1.7 billion available in cash and cash equivalents, with $15 billion in total assets. For FY23, the company increased its revenue guidance to 14%-16%. Infosys Limited (NYSE:INFY) pays a quarterly dividend of $0.177 per share, and has a dividend yield of 2.01%, as of August 15.
In July, Wedbush set a $25 price target on the stock on account of its mixed Q1 2023 results. However, the firm maintained its Outperform rating on the stock.
At the end of Q1 2022, 25 hedge funds in Insider Monkey’s database owned stakes in Infosys Limited (NYSE:INFY), down from 27 in the previous quarter. These stakes are collectively valued at over $2.2 billion.
4. Cyient Limited (NSE:CYIENT.NS)
Dividend Yield as of August 15: 2.90%
Cyient Limited (NSE:CYIENT.NS) is a Hyderabad-based multinational technology company that focuses on data analytics and network and operations. In the past five years, the stock delivered a 62.3% return to shareholders, as of the close of August 14.
In Q1 2023, Cyient Limited (NSE:CYIENT.NS) reported a revenue of INR 12.5 million, up 18.1% from the same period last year. The company’s Group and Services order intake grew by 18% year-over-year. Moreover, it also showed a 15.8% year-over-year growth in its Constant Currency Revenue.
Cyient Limited (NSE:CYIENT.NS) has a very strong dividend policy and distributes a maximum of 40% of its profit after tax as dividends to shareholders. The company offers a quarterly dividend of INR 2.90 per share, with a dividend yield of 2.90%, as recorded on August 15.
3. Sasken Technologies Limited (NSE:SASKEN.NS)
Dividend Yield as of August 15: 2.99%
Sasken Technologies Limited (NSE:SASKEN.NS) is an Indian multinational tech company that provides services in product engineering and digital transformation.
Sasken Technologies Limited (NSE:SASKEN.NS) generated $12.9 million in revenues in Q1 2023, down from $14.3 million in the preceding quarter. The company’s total assets at the end of the quarter amount to INR 7.7 million, consistent with the previous quarter. In the past five years, Sasken Technologies Limited (NSE:SASKEN.NS) delivered an 83.4% return to shareholders, as of August 15.
Sasken Technologies Limited (NSE:SASKEN.NS) offers a quarterly dividend of INR 6.25 per share. The stock’s dividend yield, as of August 15, came in at 2.99%.
2. Sonata Software Limited (NSE:SONATSOFTW.NS)
Dividend Yield as of August 15: 3.05%
Sonata Software Limited (NSE:SONATSOFTW.NS) is a Bengaluru-based global IT service company that specializes in intelligence and analytics, cloud, social media, and enterprise services. The company is one the most profitable IT names in the country, as it grew its revenue at a CAGR of 23% in the last three years.
In Q1 2023, Sonata Software Limited (NSE:SONATSOFTW.NS) reported revenue of $56.8%, which presented a 27.7% year-over-year growth. The company’s Data and Analytics unit represented 2.7% of the gross revenue, while its Managed Cloud Services accounted for 5.6%. During the quarter, the company used 42% of its cash in shareholders’ payout.
Sonata Software Limited (NSE:SONATSOFTW.NS) pays a quarterly dividend of INR 5.24 per share, with a dividend yield of 3.05%, as of August 15.
1. Oracle Financial Services Software Limited (NSE:OFSS.NS)
Dividend Yield as of August 15: 5.63%
Oracle Financial Services Software Limited (NSE:OFSS.NS) is a Mumbai-based subsidiary of Oracle Corporation. The company specializes in insurance technology, retail banking, and corporate banking.
In fiscal Q4 2022, Oracle Financial Services Software Limited (NSE:OFSS.NS) reported revenue of $11.8 billion, up 5% from the same period. The company also declared a 3% year-over-year growth in its Cloud Services revenues at $7.6 billion. In FY22, its operating cash flow came in at $9.5 billion and had $21.3 billion available in cash and cash equivalents at the end of the quarter. In 2022, Oracle Financial Services Software Limited (NSE:OFSS.NS) paid $3.4 billion in dividends to shareholders, up from $3 billion paid in 2021.
Oracle Financial Services Software Limited (NSE:OFSS.NS) pays a quarterly dividend of $0.32 per share. The stock’s dividend yield stood at 5.63% on August 15.
You can also take a look at Top Pharmaceutical Companies in India and Top 20 Internet Companies in India
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Disclosure. None. 10 Indian Tech Stocks that Pay Dividends is originally published on Insider Monkey.
