IT giant, Tata Consultancy Services (TCS) will kick start the third quarter earnings season for FY23 in the IT sector on January 9th. The Tata Group’s flagship company will also announce the third interim dividend for the fiscal on this day. However, TCS has already fixed the record date for this dividend. TCS has a strong track record of paying dividends to its shareholders. The company’s stock will also be in focus following these developments.
In its regulatory filing on December 30th, TCS said, “the third interim dividend, if declared, shall be paid 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 of Tuesday, January 17, 2023, which is the Record Date fixed for this purpose.”
Since the record date for the third interim dividend is set on January 17, thereby, TCS shares will turn ex-dividend by January 16th. The ex-dividend date is the day when the price of equity shares of a company gets adjusted for the dividend payout. Generally, the ex-dividend is one working day before the record date.
It needs to be noted that there will be tax deducted at source (TDS) imposed on the dividend a shareholder receives from a company.
As per TCS filing, a resident individual shareholder with PAN and who is not liable to pay income tax can submit a yearly declaration in Form No 15G/15H, to avail of the benefit of non-deduction of tax. However, for shareholders who have not registered their Permanent Account Number (PAN) or have an invalid PAN or Specified Person as defined under section 206AB of the Income-tax Act (“the Act”), the tax will be deducted at a higher rate prescribed under section 206AA or 206AB of the Act, as applicable.
The “specified person” is someone who has not filed their income tax return for the previous year immediately prior to the previous year in which tax is required to be deducted for which the time limit of filing of return of the income under section 139 (1) has expired, and the aggregate TDS and tax collected at source is ₹50,000 or more in that previous year.
So far in FY23, the company has paid a total dividend of 1600% aggregating to ₹16 per share. The company had announced ₹8 per share as its first interim dividend which was paid in July 2022 and a similar ₹8 per share as the second interim dividend which was paid in October 2022 for the current fiscal.
In FY22 alone, the IT major paid an equity dividend of 4,300% amounting to a whopping ₹43 per share to its shareholders.
Additionally, TCS will also announce its financial results for the third quarter period for FY23 on January 9th.
In the September 2022 quarter, TCS garnered a net profit attributable to shareholders at ₹10,431 crore in Q1FY23 up by 8.4% yoy and 10.-5% qoq. Consolidated revenue from operations came in at ₹55,309 crore rising by 18.01% yoy and 4.84% qoq. During the quarter, TCS posted growth across industry verticals and in major markets. Also, its order book stays strong.
As of September 30, 2022, TCS workforce stood at 616,171 employees — with a net addition of 9,840 during the quarter. IT services attrition was 21.5% on the last twelve months basis. TCS expects the attrition rate to taper down in the second half of FY23.
On BSE, TCS shares closed at ₹3,259.25 apiece marginally down on Friday compared to the previous closing of ₹3,269.25 apiece. TCS is the second largest company in terms of market share after RIL. As of December 30, 2022, TCS valuation is over ₹11.92 lakh crore.
At the current closing price, TCS dividend yield is around 1.32%.
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