5 Dividend Stocks to Watch Before FY 2025

2025 has been tough for the Indian stock market, given the persistent selling, leading to a severe correction. This has been fuelled by several factors, starting with the rupee depreciation, high market valuations, and a slowdown in earnings.

Moreover, foreign investors (FIIs) have been selling persistently due to the strong dollar, high bond yields, and uncertainties over Trump's policies.

The combination of these factors has created a challenging market environment, which, based on the December quarter results, is likely to persist.

In these circumstances, investors tend to prefer dividend investing. Dividend-paying stocks tend to exhibit low volatility. They provide passive income and have the potential for capital appreciation.

Some stocks even increase dividends intermittently, providing investors with steady income growth. Nevertheless, not all companies pay or increase dividends. Identifying those that are likely to do so is essential.

In this editorial, we've shortlisted 5 stocks likely to announce dividends in the last quarter of this financial year. At their current market price, these stocks also offer high dividend yields.

#1 Tata Consultancy Services

First on the list is Tata Consultancy Services.

TCS is the Tata Group's flagship enterprise, with operations in 150 locations in 46 countries. It's Asia's largest IT services and consulting company, and second globally after Accenture.

It provides consulting, service integration, and application management services to various sectors, including banking, capital markets, education, healthcare, and insurance.

TCS is a cash-rich company known for rewarding its shareholders handsomely. Its average dividend payout ratio has been 65% in the last five years.

In FY24, it paid a dividend of Rs 73 per share, translating into a dividend payout ratio of 57.3%.

So far in FY25, TCS has paid a dividend of Rs 96 per share, a significant increase over last year. This translates to a yield of 2.8% at the current market price of Rs 3,500.

TCS Dividend History (FY20-24)

Particulars	FY20	FY21	FY22	FY23	FY24
Dividend Per share (Adj.) Rs	75.7	38.8	43.4	116.3	73.0
Dividend Payout ratio (%)	84.4	43.2	40.9	99.5	57.3
Dividend Yield (%)	4.0	1.2	1.2	3.6	1.9

Source: Equitymaster

With a consistent history of payouts, TCS is likely to continue its track record of paying out in the fourth quarter as well.

Currently, TCS is navigating challenges in the demand environment due to muted spending in the US market, which, per management, is expected to reverse in FY26.

The recent tariff measures by the Trump administration have also raised fears of a slowdown, which doesn't bode well for IT companies.

Nonetheless, TCS has a strong order book and is investing in the next growth drivers in emerging technologies, like investments in agentic AI capabilities.

In FY24, TCS generated an operating cash flow (OCF) of Rs 451 billion (bn). It distributed 102% of OCF to shareholders, as per TCS FY24 annual report. Given its past two decades of distributing 77.5% of its OCF, TCS will continue to reward shareholders in the future.

Check out TCS fact sheet and quarterly results to know more.

#2 Manappuram Finance

Second on the list is Manappuram Finance.

Manappuram Finance is a non-banking financial company and India's second largest gold lender, with a nationwide reach.

51% of its total AUM comes from gold loans, while 49% comes from its non-gold portfolio. Manappuram's focus on gold loans has helped it maintain strong asset quality.

Manappuram has paid an average dividend of 14.2% over the last five years, with an average dividend of Rs 2 per share.

In FY25, it paid a dividend of Rs 4, which, as per the stock price of Rs 196, results in a dividend yield of about 2%.

Manappuram Dividend History (FY20-24)

Particulars	FY20	FY21	FY22	FY23	FY24
Dividend Per share (Adj.) Rs	2.7	1.3	3.0	3.0	3.3
Dividend Payout ratio (%)	15.8	6.1	19.1	17.0	12.8
Dividend Yield (%)	2.9	0.8	2.6	2.4	1.9

Source: Equitymaster

With a consistent history of payouts, Manappuram is likely to continue its track record of paying out in the fourth quarter as well. However, key concerns remain for the business, including rising stress in its microfinance lending book.

Going forward, the gold business will remain the main driver of growth. Rising gold prices and growing customer demand are expected to drive 15-20% annual growth in this segment.

Manappuram is also expanding its secured loan portfolio, especially in vehicle and home loans, which will help it diversify. Further, due to the economic challenges, it is reducing its lending operations as borrowers face repayment issues.

Check out Manappuram Finance fact sheet and quarterly results to know more.

#3 HCL Technologies

Third on the list is HCL Technologies.

HCL Tech is among the top five Indian IT services companies in terms of revenues. It offers IT, BPO, engineering, and R&D services and various products and platforms to its client base across 46 countries.

The company has a history of consistent dividend payments. Over the last 20 years, HCL Tech has paid a dividend 85 times, with an average dividend payout of Rs 19.8.

Notably, over the last 5 years, the company has paid an average dividend of Rs 32, with a dividend payout ratio of 62%.

It has maintained its track record of rewarding shareholders in FY25, in which so far, it has paid a total dividend of Rs 42 which equates to a dividend yield of 2.7%.

HCL Dividend History (FY20-24)

Particulars	FY20	FY21	FY22	FY23	FY24
Dividend Per share (Adj.) Rs	10.0	10.0	42.0	48.0	51.0
Dividend Payout ratio (%)	24.5	24.3	84.3	87.7	89.8
Dividend Yield (%)	2.3	1.0	3.6	4.4	3.4

Source: Equitymaster

HCL Tech, with its consistent history of dividend payments, is likely to maintain its track record in the fourth quarter as well. This could also be increased given the subdued return of the stock price.

Currently, HCL, like TCS, is facing challenges in the demand environment due to low discretionary spending in the US market.

Nonetheless, the company is focusing on medium-term growth areas, freeing up capital to fund investments, increasing market share, and expanding margins.

HCL Tech is expanding in the data and AI markets, driven by growing demand for enterprise business applications and cloud-native solutions.

In addition, it is focusing on growth in cybersecurity services driven by cloud migration and demand for security solutions. Moreover, HCL Tech's chip-to-cloud offerings position it well to meet semiconductor demand.

Check out HCL Technologies fact sheet and quarterly results to know more.

#4 Vedanta

Fourth on the list is Vedanta.

Vedanta is one of the world's leading natural resources groups that explores, extracts, and processes minerals, including zinc, lead, silver, copper, aluminium, oil, and gas.

It is also present in other businesses, including commercial power generation, steel manufacturing, port operations, and glass substrate manufacturing.

It is India's sole nickel producer and accounts for around 60% of India's total aluminium production. It has a diversified geographical presence in India, South Africa, Namibia, Ireland, Liberia, and UAE.

The company has been among India's highest dividend payers in the last five years.

During the period, Vedanta paid an average per-share dividend of Rs 37 and an average payout ratio of almost 94%.

Vedanta Dividend History (FY20-24)

Particulars	FY20	FY21	FY22	FY23	FY24
Dividend Per share (Adj.) Rs	3.7	9.0	42.8	96.5	28.0
Dividend Payout ratio (%)	-30.6	23.5	70.6	260.3	145.6
Dividend Yield (%)	6.0	4.2	11.2	36.9	10.9

Source: Equitymaster

In FY25, until the third quarter, it paid a dividend of Rs 43.5 per share, including Rs 8.5 in Q3. This translates into a dividend yield of 9.8% at CMP of Rs 442.5.

Vedanta is a cash-rich company that generates substantial cash flow yearly, which it uses to reward shareholders. Its cash & cash equivalent stood at Rs 154.2 bn in FY24.

It also receives dividends from Hindustan Zinc, which it routes to shareholders. The average dividend paid by Hindustan Zinc over the last 20 years stands at Rs 14.9.

Thus, with its consistent payment history and business strength, Vedanta is also expected to continue its payment track record in the fourth quarter.

Looking ahead, the company is expanding its aluminium and power business, with a total capital expenditure of Rs 170 bn. The company expects the economic benefits from its expansion plans to start accruing from FY26.

It is also expected to benefit from India's National Critical Minerals Mission (NCMM), which aims to accelerate exploration of critical minerals in the country's onshore and offshore areas.

Check out Vedanta fact sheet and quarterly results to know more.

#5 ITC

Last on the list is ITC.

ITC is India's largest cigarette manufacturer, with a market share of about 75%. The cigarette business contributes 36% to the revenue and is a cash cow.

Apart from cigarettes, ITC also operates in four business segments: FMCG, paperboards, paper and packaging, and agribusiness.

ITC remains a debt-free company, consistently generating high free cash flow yearly. In FY24 alone, it generated a free cash flow of Rs 137 bn, which it uses to pursue inorganic growth, expansion, and shareholder rewards.

It has been paying a consistent dividend since 1994, funded mainly by the cigarette business.

Over the last five years, ITC has delivered an average dividend of Rs 12 per share, with an average payout ratio of 90%.

In FY25, it has paid a dividend of Rs 14 per share, which, as per the stock price of Rs 412, comes out to a dividend yield of 3.4%.

ITC Dividend History (FY20-24)

Particulars	FY20	FY21	FY22	FY23	FY24
Dividend Per share (Adj.) Rs	9.9	10.5	11.3	15.3	13.7
Dividend Payout ratio (%)	80.0	98.9	91.4	98.9	82.7
Dividend Yield (%)	5.9	4.9	4.6	4.0	3.2

Source: Equitymaster

ITC distributes about 80-85% of its post-tax profit as dividends every year, a practice that is expected to continue given its dominant position and the cash flow it generates.

Going forward, the company wants to reduce its dependence on the cigarette business. To that end, it aims to invest Rs 200 bn in the next five years to expand its non-cigarette businesses.

The expansion will be funded through internal accruals. Moreover, despite near-term headwinds, it is also looking to expand its FMCG business through inorganic growth.

Check out ITC fact sheet and quarterly results to know more.

Conclusion

These were some of the stocks that investors can consider adding to their watchlist as we approach the end of FY25. They have cash-rich balance sheets and are known for rewarding shareholders.

With a consistent payout history, they are likely to continue their track record of paying out in the fourth quarter as well.

Investing in dividend-paying companies can be a smart financial strategy for generating passive income.

One advantage is that if a company consistently increases its dividends, investors not only keep pace with inflation but also benefit from potential capital appreciation, thus increasing the overall returns over time.

Such stocks can also provide protection against downturns in volatile markets and can be used for portfolio diversification.

Nevertheless, buying dividend-paying stocks does not mean picking the ones with the highest yields. You must thoroughly check the business fundamentals before buying a high dividend-yield stock.

Happy Investing.

Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here...