Understand the complete mathematics of dividend
Tata Motors Passenger Vehicles Group (TMPVL) has declared its financial results for the March quarter as well as the entire financial year 2026. If we look at the figures, the profit before tax (PBT) of the company has been Rs 7,167 crore. This figure is Rs 3,031 crore less than last year. Investors may panic after seeing this big decline in profits. But, the twist in the story is that despite this decline, the company has recommended a final dividend of Rs 3 per share for its shareholders. After all, when the company’s profits have declined, then how is it giving this gift to the investors? This question is bound to arise in the mind of every person investing in the stock market. Let us understand in detail.
Understand the complete mathematics of dividend
Dividend in the stock market simply means the profits that companies share with their investors. This can be seen from the perspective of a family business. When the head of the household makes good profits in business, he gives some extra amount to the family members. Similarly, when a company earns profit, it gives a part of it to its shareholders. This money reaches the bank accounts of the investors directly.
The thing to note is that the dividend is always decided on the ‘face value’ of the share and not on its market price. Suppose the face value of a share is Rs 10 and the company gives a dividend of Rs 40, then it means that it has declared 400 percent dividend. Companies usually take this step to maintain the confidence of their investors.
Profit can be divided even among losses
It is generally believed that only companies making bumper earnings pay dividends. But it is also a fact of the market that dividend can be distributed even in case of low profits or losses. Same thing has happened in the case of Tata Motors also. Despite the decline in profits, the company had a strong ‘free cash flow’ of Rs 11.4 thousand crore in the fourth quarter. The company has considered this to be a very healthy level for business.
According to the rules of the Companies Act 1956, in case of decline in profits, companies can pay dividends from their old ‘free cash reserves’ or accumulated profits of previous years. If we look at the old data, even big companies like Bharti Airtel and Adani Port have distributed dividends in the past despite losses. However, there is a maximum limit for distributing money from the cash reserve.
These four dates will decide your profits
To avail the benefit of dividend, investors have to keep in mind four important dates. These are- Announcement Date, Ex-Dividend Date, Record Date and Payment Date. When the company declares the dividend, it is the ‘announcement date’. After this the company decides a ‘record date’. On this date, only those people who have shares of the company in their demat account get the dividend.
Settlement of purchase and sale in the stock market takes time, hence ‘ex-dividend date’ is fixed one day before the record date. To be entitled to the dividend, it is mandatory for you to purchase shares before the ex-dividend date. After the completion of the entire process, the day on which the money is deposited in your account is called ‘payment date’.
These companies also opened their treasury
Apart from Tata Motors, many other big companies have also made preparations to please the investors for the financial year 2026. Apollo Tires has declared a final dividend of Rs 2.50, taking its total dividend to Rs 6 per share. Kalpataru Projects International and United Spirits have announced a big dividend of Rs 11-11 per share.
In this series, Galaxy Surfactants has proposed a huge dividend of Rs 22 per share. Apart from this, Kirloskar Oil Engines (Rs 4.50), Carborundum Universal (total Rs 4), TD Power Systems (Rs 1.10), Pitti Engineering (Rs 2.50) and KRBL (Rs 4.50) have also declared dividend. Mukand Limited, The Great Eastern Shipping Company, Deep Industries, Comfort Fincap, Sensis Tech, B.N. Rathi Securities and Andhra Paper have also recommended dividend for their respective shareholders. Most of these payments will be made on fixed dates after getting final approval at the Annual General Meeting (AGM) of the shareholders.
