The combined net profit of the 1,495 listed firms in the sample rose 18.8 per cent year-on-year in FY26, while adjusted net profit, excluding extraordinary gains and losses, rose 14.9 per cent year-on-year. As a result, the dividend payout ratio – the proportion of net profit paid out to shareholders – fell to 25.7 per cent in FY26, the lowest in at least 12 years. The ratio had fallen to 29.8 per cent in FY2015 from a record 61.4 per cent in FY20, when the Covid-19 pandemic caused a sharp decline in corporate earnings and increased the payout ratio. Over the past 12 years, the average payout ratio has been around 40 percent.

The marginal increase in shareholder payout during FY26 was entirely due to an increase in share buybacks, while there was a marginal decline in equity dividends.

1,495 companies business standard The sample paid a combined ₹4.86 trillion in equity dividends in FY26, compared to ₹4.87 trillion in FY25. Additionally, 14 companies spent ₹19,378 crore on share buyback during the year, significantly higher than ₹7,827.5 crore spent by 32 companies in FY2025.

The increase in buybacks was almost entirely due to Infosys, which had completed a buyback of ₹18,000 crore in September last year. The company also distributed ₹19,430.4 crore in equity dividends in FY26, taking its total shareholder payout during the financial year to ₹37,430.4 crore.

This was Infosys’ highest ever annual payout and its payout ratio was 127.1 percent. In comparison, the company returned ₹17,828 crore to shareholders in FY2015, entirely through dividends, implying a payout ratio of 66.7 per cent.

The combined reported net profit of the companies in the sample rose to ₹19.71 trillion in FY26, from ₹16.59 trillion a year earlier. Adjusted net profit increased from ₹15.95 trillion to ₹18.32 trillion in the same period. The payout ratio has been calculated using reported net profit as per convention.

The sharp increase in retained earnings despite double-digit earnings expansion was due to a modest increase in shareholder payouts – the portion of profits kept on the corporate balance sheet rather than distributed to shareholders. Combined retained earnings grew 25.9 per cent to ₹14.66 trillion in FY26 from ₹11.64 trillion in FY25.

Companies typically deploy retained earnings to finance capital expenditure, make acquisitions, build cash reserves or invest in liquid financial assets such as government securities and mutual funds.

The combined cash and bank balances of companies in the sample rose 12.3 per cent to about ₹18 trillion at the end of FY26, from ₹16.02 trillion a year ago. Total investments, including holdings in bonds, debentures and mutual fund units, rose 6.4 per cent to nearly ₹19 trillion from ₹17.86 trillion.

In contrast, the combined fixed assets of these companies grew by only 2.1 per cent to ₹81.91 trillion at the end of the last financial year.

Among individual companies, Tata Consultancy Services remained the country’s biggest dividend payer, despite a 12.7 per cent decline in total shareholder payout. The company distributed dividends of ₹39,820 crore for FY26, compared to a record ₹45,612 crore in FY25.

Infosys ranks second with total payout of ₹37,430.4 crore, followed by HDFC Bank (₹23,859.8 crore), ITC (₹18,167.8 crore) and Oil and Natural Gas Corporation (₹16,668.9 crore). Other major payers include Coal India, State Bank of India, HCL Technologies, Bharti Airtel and Power Grid Corporation.