SYNOPSIS:
The article highlights companies that distribute over 80% of their profits as dividends. Such a high payout signals strong shareholder returns but also raises concerns about limited reinvestment for growth.
A company with a healthy dividend payout ratio shares a fair portion of its profits with shareholders while keeping enough money to reinvest in the business. This shows that the company is financially stable, earning steady profits, and confident about its future performance.
The companies listed below have a dividend payout ratio exceeding 80%:
1. Hindustan Zinc Limited
Hindustan Zinc Limited, a Vedanta Group company, is India’s largest and among the world’s leading integrated producers of zinc, lead, and silver. Headquartered in Udaipur, Rajasthan, the company has a robust resource base and operates fully integrated operations covering mining, smelting, and power generation.
With a market capitalization of Rs.1,91,406.95 crores, the shares of Hindustan Zinc Limited closed at Rs.453, down by 0.42 percent from its previous day closing price of Rs.454.90.
In the first quarter of FY26, the company’s revenue fell to Rs.7,723 crore, compared to Rs.8,130 crore in the same quarter of FY25. However, net profit fell to Rs.2,204 crore from Rs.2,358 crore for the same period.
The company has a strong return on equity of 72.4 percent and a return on capital employed of 60.7 percent. The P/E ratio is 19.26 with an industry average of 31.45. The dividend payout ratio is high at 119.20 percent for FY25, indicating the company is paying more dividends to the shareholders, but it is also a red flag that the company is not keeping enough profits for future growth.
2. Vedanta Limited
Vedata Limited is a leading global natural resources company with operations in India, Namibia, and South Africa. It manufactures a wide range of products, including aluminium, copper, zinc, steel, ferrochrome, nickel, cement, and commercial energy.
With a market capitalization of Rs.1,78,137.73 crores, the shares of Vedanta Limited closed at Rs.455.55, up by 0.08 percent from its previous day closing price of Rs.455.20.
In the first quarter of FY26, the company’s revenue rose to Rs.37,824 crore, compared to Rs.35,764 crore in the same quarter of FY25. However, net profit fell to Rs.4,457 crore from Rs.5,095 crore for the same period.
The company has a strong return on equity of 38.5 percent and a return on capital employed of 25.3 percent. The P/E ratio is 13.40 with an industry average of 47.36. The dividend payout ratio is high at 113.48 percent for FY25, indicating the company is paying more dividends to the shareholders, but it is also a red flag that the company is not keeping enough profits for future growth.
3. HCL Technologies Limited
The company mainly offers software services, business process outsourcing, and infrastructure solutions. It uses a large global technology workforce and its own intellectual properties to serve different industries such as financial services, manufacturing, healthcare, and life sciences.
With a market capitalization of Rs.3,98,203.22 crores, the shares of HCL Technologies Limited closed at Rs.1,4673.40, down by 1.76 percent from its previous day closing price of Rs.1,493.70.
In the first quarter of FY26, the company’s revenue rose to Rs.30,349 crore, compared to Rs.28,057 crore in the same quarter of FY25. However, net profit fell to Rs.3,844 crore from Rs.4,259 crore for the same period.
The company has a strong return on equity of 25 percent and a return on capital employed of 31.6 percent. The P/E ratio is 23.68 with an industry average of 29.96. The dividend payout ratio is high at 93.67 percent for FY25, indicating the company is paying more dividends to the shareholders, but it is also a red flag that the company is not keeping enough profits for future growth.
4. Tech Mahindra Limited
Tech Mahindra Limited offers a wide range of IT services such as IT-enabled solutions, application development and maintenance, consulting, and enterprise business solutions.
With a market capitalization of Rs.1,52,223.98 crores, the shares of Tech Mahindra Limited closed at Rs.1,554, up by 0.24 percent from its previous day closing price of Rs.1,550.35.
In the first quarter of FY26, the company’s revenue rose to Rs.13,351 crore, compared to Rs.13,006 crore in the same quarter of FY25. However, net profit rose to Rs.1,129 crore from Rs.865 crore for the same period.
The company has a strong return on equity of 14.6 percent and a return on capital employed of 18.6 percent. The P/E ratio is 33.04 with an industry average of 29.96. The dividend payout ratio is high at 93.65 percent, indicating the company is paying more dividends to the shareholders, but it is also a red flag that the company is not keeping enough profits for future growth.
5. Dabur India Limited
Dabur India Limited is one of India’s top FMCG companies, known for its Ayurvedic and natural healthcare products, with a strong distribution network worldwide. With a market capitalization of Rs.94,972.24 crores, the shares of Dabur India Limited closed at Rs.535.45, down by 0.09 percent from its previous day closing price of Rs.535.95.
In the first quarter of FY26, the company’s revenue fell to Rs.3,405 crore, compared to Rs.3,349 crore in the same quarter of FY25. However, net profit rose to Rs.508 crore from Rs.494 crore for the same period.
The company has a strong return on equity of 17 percent and a return on capital employed of 20.2 percent. The P/E ratio is 53.38 with an industry average of 2.88. The dividend payout ratio is high at 80.21 percent, indicating the company is paying more dividends to the shareholders, but it is also a red flag that the company is not keeping enough profits for future growth.
Written by Jhanavi Sivakumar
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