Tata Elxsi, Tata Steel Dividend: Shares of two Tata group companies, Tata Elxsi and Tata Steel, are set to trade ex-dividend today (June 22). Tata Steel is set to pay a 360 per cent dividend to its shareholders, while Tata Elxsi will pay a whopping 606 per cent for the financial year FY23.
Shares of companies usually trade ex-dividend on the day or a day before the record date. When a company goes ex-dividend on a particular date, its stock does not carry the value of the next dividend payment.
Tata Elxsi
Tata Elxsi announced a final dividend of 606 per cent at Rs 60.60 per share for the financial year 2022-23, which will be paid on or after the seventh day from the conclusion of the 34th AGM. The company has fixed June 23 as the record date for the same.
So far this year, Tata Elxsi stock has risen about 23 per cent.
Tata Elxsi is a leading provider of design and technology services across industries, including automotive, media, communications, healthcare, and transportation.
The company offers integrated offerings – from research and strategy to electronics and mechanical design, software development, validation, and deployment, and is supported by a network of design studios, global development centres, and offices worldwide.
In FY22, the company paid a dividend of 425 per cent aggregating to Rs 42.50 per share to its shareholders.
Last month, in a research note, Sharekhan said, “Tata Elxsi is well-positioned to capture opportunities in Automotive and other verticals on account of their deep domain knowledge, scale, and expertise in software development and digital technologies like AI and IoT. We expect a ~18 per cent/13 per cent Sales and PAT CAGR respectively over FY23- 25E.”
Sharekhan also highlighted that the company believes that the growth demonstrated in the transportation vertical over the years will continue in the coming financial year. In the Media and Healthcare verticals, there are positive signs of growth returning, although it is still in the early stages. The emergence of 5G opportunities and deals further strengthens the management’s belief that growth will pick up in the latter half of Q1 and Q2.
Also, the company is focused on building a strong deal pipeline and anticipates an increase in large deal conversions in the current quarter and beyond. They have experienced significant growth in their key accounts, increasing their wallet share compared to competitors.
Tata Steel
Tata Steel’s board recommended a dividend of Rs 3.60 per share of face value Re 1 each, for the financial year ended March 2023.
On a year-to-date basis, the stock is down 4 per cent. Tata Steel’s stock has given a positive return of nearly 36 per cent in the last 12 months (from June 22, 2022). In comparison, the headline index Nifty 50 has rallied over 22 per cent.
Tata Steel, one of the flagship companies of the Tata group, is among the top global steel companies with an annual crude steel capacity of 35 million tonnes per annum. The company recorded a consolidated turnover of $30.3 billion in the financial year 2022-23.
Over the last two decades, Tata Steel has paid 29 dividends and in the last one year, the company has paid an equity dividend amounting to Rs 12.75 per share.
On June 14, ICICI Direct added Tata Steel to its gladiator stocks list. It recommended a target price of Rs 125 apiece for the stock with a stop loss of Rs 106 apiece. The buying range is recommended to be between Rs 110-113.
That being said, there is a potential upside of 10 per cent in Tata Steel stock. ICICI Direct sets 3 months for the stock to achieve the target price.
In its note, ICICI Direct said, “The Metal index, in the last couple of months, witnessed a steady pullback after the January-February 2023 sharp corrective decline. Many quality stocks in the metal sector have undergone healthy price/time correction and are now offering a favourable risk-reward setup. Within the metal stocks, we remain constructive on metal heavyweight Tata Steel as it is resolving above the last three month’s triangular consolidation signalling resumption of up move. Hence, it provides a fresh entry opportunity.”
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