India’s major information technology firms, as represented by the Nifty IT index, collectively distributed a historic dividend of Rs 1 lakh crore during the fiscal year 2026. This record payout was made in the context of a challenging sector, which has been characterised by concerns over the potential disruption of traditional software service models due to advances in artificial intelligence, decreasing profit expectations, and more cautious spending by clients.

The total dividend figure for FY26 reached Rs 1.01 lakh crore, indicating a 3.34 per cent increase from Rs 96,782 crore in FY25 and Rs 69,976 crore in FY24. This upward trend reflects a commitment to rewarding shareholders, despite the adverse market conditions faced by the sector.

Mixed Responses from Major IT Firms

While the overall dividend distribution saw positive growth, the response was not uniform among all companies. Only Tata Consultancy Services (TCS) and Coforge opted to reduce their dividend payouts during the fiscal year. In contrast, HCL Technology maintained its dividend at the same level, while the other seven firms—Infosys, LTIMindtree, Mphasis, Oracle Financial Services, Persistent Systems, Tech Mahindra, and Wipro—increased their dividend payments.

Specifically, TCS, the largest company on the index, reported a 12.7 per cent decrease in its dividend, lowering it to Rs 39,820 crore from Rs 45,588 crore in the previous year. Coforge experienced a more significant decline, with its dividend drop of over 20 per cent to Rs 404 crore from Rs 509 crore. HCL Technology held steady at Rs 16,290 crore.

Wipro was notable for its substantial increase, raising its dividend by 84 per cent to Rs 11,538 crore. Additionally, Oracle Financial Services enhanced its dividend by over 51 per cent to Rs 3,480 crore, compared to Rs 2,300 crore in FY25. Other firms like Persistent Systems and LTIMindtree also recorded dividend increases, with 15.7 per cent and 15.4 per cent rises, respectively.

Impact of Stock Market Decline on Investors

Despite the large dividend payouts, many investors faced significant declines in the stock value of these firms over the past year. TCS experienced the most considerable decrease, with a drop of over 34 per cent. HCL Technology and Infosys followed, with reductions of 30 per cent and 29 per cent, respectively. Coforge and Wipro each saw their stock valuations plummet by 23 per cent, while LTIMindtree and Mphasis experienced declines of 20 per cent and 18 per cent.

The overall performance of the Nifty IT Index was notably poor, with a decline of 26.6 per cent, significantly worse than the Nifty 50, which only fell by 4 per cent. This reflects broader industry challenges despite the seemingly positive signal from dividend increases.

The earnings season has further compounded concerns, with Kotak Institutional Equities describing the fourth quarter FY26 results as somewhat disappointing, citing growth estimates that fell short, limited deal acquisitions, and guidance that did not meet expectations. The ongoing threat of revenue deflation from generative AI technologies continues to exert pressure on company valuations, as noted by analysts.

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