Financial Management

Project
GROUP – 1
Members

Name Registration Number

Abhijeet Bose 017PGDM071
Anirban Banerjee 017PGDM080
Arpita Basu 017PGDM085
Gourav Guha 017PGDM090
Ishita Pal 017PGDM092
Nabarun Ghosh 017PGDM101
Nilankur Saha 017PGDM105
Rahul Singh 017PGDM113
Rumki Sarkar 017PGDM116
Uddalok Chatterjee 017PGDM128
Introduction

Three main decisions in Financial Management : -

1. Investment Decision
2. Financing Decision
3. Dividend Decision

What is Dividend?
A dividend is a distribution of a portion of a company's earnings, decided by
the board of directors, paid to a class of its shareholders. Dividends can be
issued as cash payments, as shares of stock, or other property
Dividend Decision
Characteristics of Dividends

 Dividends are sticky

 Dividend tend to follow earnings
 More and more companies are choosing share buyback over paying dividend

Balanced Viewpoint of Dividends

 If a company has excess cash, and few good investment opportunities (NPV>0),
returning money to stockholders (dividends or stock repurchases) is good.
 If a company does not have excess cash, and/or has several good investment
opportunities (NPV>0), returning money to stockholders (dividends or stock
repurchases) is bad.
Dividend Policy in Indian Companies

 Almost all companies listed in the BSE 100 in India pay dividend
 Normally, the dividends are paid twice a year, interim and final.
 In some companies dividends are paid more than twice a year.
 The Dividend Distribution Tax in India is 15% which is paid by the company.
Companies

Name Sector

Glenmark Pharmaceuticals Ltd. Pharmaceuticals

Godrej Consumer Products Ltd. FMCG

Grasim Industries Ltd. Textile

Hero Motocorp Ltd. Motorbikes

H C L Technologies Ltd. IT

Hindustan Unilever Ltd. FMCG

Infosys Ltd. IT

Idea Cellular Ltd. Telecom

Indian Oil Corporation Ltd. Oil exploration and mining

I T C Ltd. FMCG

Hindustan Zinc Ltd. Mining

Hindustan Petroleum Corporation Ltd. Oil exploration and mining

Hindalco Industries Ltd. Aluminium manufacturing

 Grasim Industries Ltd.
DPS EPS
25.00 200

20.00 150

15.00 100

10.00 50

5.00 0
2012-13 2013-14 2014-15 2015-16 2016-17
0.00
2012-13 2013-14 2014-15 2015-16 2016-17

Dividend Payout Ratio Dividend Yield

35% 6.00%
30% 5.00%
25%
4.00%
20%
3.00%
15%
2.00%
10%
5% 1.00%

0% 0.00%
2012-13 2013-14 2014-15 2015-16 2016-17 2012-13 2013-14 2014-15 2015-16 2016-17
 Grasim Industries Ltd.
Share Price Return
4.00%

3.00%

2.00%

1.00%

0.00%
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

-1.00%

-2.00%

-3.00%

-4.00%
2012-13 2013-14 2014-15 2015-16 2016-17 Linear (2015-16)

Source – Self Calculated

 Hindustan Petroleum Corporation Ltd.
DPS EPS
40.00 120
35.00 100
30.00 80
25.00 60
20.00 40
15.00
20
10.00
0
5.00 2012-13 2013-14 2014-15 2015-16 2016-17
0.00
2012-13 2013-14 2014-15 2015-16 2016-17

Dividend Payout Ratio Dividend Yield

60% 25.00%

50% 20.00%
40%
15.00%
30%
10.00%
20%

10% 5.00%

0% 0.00%
2012-13 2013-14 2014-15 2015-16 2016-17 2012-13 2013-14 2014-15 2015-16 2016-17
Source – Self Calculated
Hindustan Petroleum Corporation Ltd.
Share Price Return
8

0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21
-2

-4

-6

-8

-10
2012-13 2013-14 2014-15 2015-16 2016-17 Linear (2013-14)

Source – Self Calculated

 Hindustan Zinc Ltd.
DPS EPS
35.00 25
30.00 20
25.00 15
20.00
10
15.00
5
10.00
0
5.00
2012-13 2013-14 2014-15 2015-16 2016-17
0.00
2012-13 2013-14 2014-15 2015-16 2016-17

Dividend Payout Ratio Dividend Yield

160% 18.00%
140% 16.00%
120% 14.00%
12.00%
100%
10.00%
80%
8.00%
60% 6.00%
40% 4.00%
20% 2.00%
0% 0.00%
2012-13 2013-14 2014-15 2015-16 2016-17 2012-13 2013-14 2014-15 2015-16 2016-17
Source – Self Calculated
 Hindustan Zinc Ltd.
Share Price Return
10.00%

5.00%

0.00%
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31

-5.00%

-10.00%

-15.00%
2012-13 2013-14 2014-15 2015-16 2016-17 Linear (2013-14)

Source – Self Calculated

 Infosys Ltd.
DPS EPS
60.00 200

50.00 150
40.00
100
30.00
50
20.00

10.00 0
2012-13 2013-14 2014-15 2015-16 2016-17
0.00
2012-13 2013-14 2014-15 2015-16 2016-17

Dividend Payout Ratio Dividend Yield

60% 3.50%

50% 3.00%
2.50%
40%
2.00%
30%
1.50%
20%
1.00%
10% 0.50%
0% 0.00%
2012-13 2013-14 2014-15 2015-16 2016-17 2012-13 2013-14 2014-15 2015-16 2016-17
Source – Self Calculated
 Infosys Ltd.
Share Price Return
8.00%

6.00%

4.00%

2.00%

0.00%
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21

-2.00%

-4.00%

-6.00%

-8.00%
2016-17 2015-16 2014-15 2013-14 2012-13 Linear (2015-16)

Source – Self Calculated

 Indian Oil Corporation Ltd.
DPS EPS
30.00 50

25.00 40

20.00 30

15.00 20

10.00 10

5.00 0
2012-13 2013-14 2014-15 2015-16 2016-17
0.00
2012-13 2013-14 2014-15 2015-16 2016-17

Dividend Payout Ratio Dividend Yield

100% 20.00%

80%
15.00%
60%
10.00%
40%
5.00%
20%

0% 0.00%
2012-13 2013-14 2014-15 2015-16 2016-17 2012-13 2013-14 2014-15 2015-16 2016-17
Source – Self Calculated
 Indian Oil Corporation Ltd.
Share Price Return
6.00%

4.00%

2.00%

0.00%
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21

-2.00%

-4.00%

-6.00%
2016-17 2015-16 2014-15 2013-14 2012-13 Linear (2015-16)

Source – Self Calculated

 Hindustan Unilever Ltd.
DPS EPS
20.00 21
20
15.00 19
18
10.00 17
16
5.00
15
2012-13 2013-14 2014-15 2015-16 2016-17
0.00
2012-13 2013-14 2014-15 2015-16 2016-17

Dividend Payout Ratio Dividend Yield

120% 3.50%

100% 3.00%
2.50%
80%
2.00%
60%
1.50%
40%
1.00%
20% 0.50%
0% 0.00%
2012-13 2013-14 2014-15 2015-16 2016-17 2012-13 2013-14 2014-15 2015-16 2016-17
Source – Self Calculated
 Hindustan Unilever Ltd.
Share Price Return
6.00%

4.00%

2.00%

0.00%
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30

-2.00%

-4.00%

-6.00%

-8.00%

-10.00%
2012-13 2013-14 2014-15 2015-16 2016-17 Linear (2013-14)

Source – Self Calculated

 I T C Ltd.
DPS EPS
9.00 14
8.00 12
7.00 10
6.00 8
5.00 6
4.00 4
3.00 2
2.00 0
1.00 2012-13 2013-14 2014-15 2015-16 2016-17
0.00
2012-13 2013-14 2014-15 2015-16 2016-17

Dividend Payout Ratio Dividend Yield

70% 3.00%
60% 2.50%
50%
2.00%
40%
1.50%
30%
1.00%
20%
10% 0.50%

0% 0.00%
2012-13 2013-14 2014-15 2015-16 2016-17 2012-13 2013-14 2014-15 2015-16 2016-17
Source – Self Calculated
 I T C Ltd.
Share Price Return
6.00%

5.00%

4.00%

3.00%

2.00%

1.00%

0.00%
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
-1.00%

-2.00%

-3.00%

-4.00%
2012-13 2013-14 2014-15 2015-16 2016-17 Linear (2013-14)

Source – Self Calculated

 Hindalco Industries Ltd.
DPS EPS
1.60 10
1.40 8
1.20
6
1.00
0.80 4
0.60 2
0.40
0
0.20 2012-13 2013-14 2014-15 2015-16 2016-17
0.00
2012-13 2013-14 2014-15 2015-16 2016-17

Dividend Payout Ratio Dividend Yield

40% 1.40%
35% 1.20%
30% 1.00%
25%
0.80%
20%
0.60%
15%
10% 0.40%
5% 0.20%
0% 0.00%
2012-13 2013-14 2014-15 2015-16 2016-17 2012-13 2013-14 2014-15 2015-16 2016-17
Source – Self Calculated
 Hindalco Industries Ltd.
Share Price Return
10.00%

8.00%

6.00%

4.00%

2.00%

0.00%
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
-2.00%

-4.00%

-6.00%

-8.00%

-10.00%
2012-13 2013-14 2014-15 2015-16 2016-17 Linear (2013-14)

Source – Self Calculated

 Godrej Consumer Products Ltd.
DPS EPS
6.00 30
5.80 25
5.60 20
5.40 15

5.20 10
5
5.00
0
4.80
2012-13 2013-14 2014-15 2015-16 2016-17
4.60
2012-13 2013-14 2014-15 2015-16 2016-17

Dividend Payout Ratio Dividend Yield

35% 0.70%
30% 0.60%
25% 0.50%
20% 0.40%
15% 0.30%
10% 0.20%
5% 0.10%
0% 0.00%
2012-13 2013-14 2014-15 2015-16 2016-17 2012-13 2013-14 2014-15 2015-16 2016-17

Source – Self Calculated

Godrej Consumer Products Ltd.
Share Price Return
10.00%

8.00%

6.00%

4.00%

2.00%

0.00%
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30
-2.00%

-4.00%

-6.00%

-8.00%
2012-13 2013-14 2014-15 2015-16 2016-17 Linear (2013-14)

Source – Self Calculated

 Idea Cellular Ltd.
DPS EPS
0.70 10
0.60 8
0.50 6
0.40
4
0.30
2
0.20
0
0.10
2012-13 2013-14 2014-15 2015-16 2016-17
0.00
2012-13 2013-14 2014-15 2015-16 2016-17

Dividend Payout Ratio Dividend Yield

14% 0.60%
12% 0.50%
10%
0.40%
8%
0.30%
6%
0.20%
4%
2% 0.10%

0% 0.00%
2012-13 2013-14 2014-15 2015-16 2016-17 2012-13 2013-14 2014-15 2015-16 2016-17
Source – Self Calculated
 Idea Cellular Ltd.
Share Price Return
8.00%

6.00%

4.00%

2.00%

0.00%
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30

-2.00%

-4.00%

-6.00%

-8.00%
2012-13 2013-14 2014-15 2015 Linear (2013-14)

Source – Self Calculated

 H C L Technologies Ltd.
DPS EPS
80.00 150
70.00
60.00 100
50.00
40.00 50
30.00
20.00
0
10.00 2012-13 2013-14 2014-15 2015-16 2016-17
0.00
2012-13 2013-14 2014-15 2015-16 2016-17

Dividend Payout Ratio Dividend Yield

140% 18.00%
120% 16.00%
14.00%
100%
12.00%
80% 10.00%
60% 8.00%
6.00%
40%
4.00%
20% 2.00%
0% 0.00%
2012-13 2013-14 2014-15 2015-16 2016-17 2012-13 2013-14 2014-15 2015-16 2016-17
Source – Self Calculated
 H C L Technologies Ltd.
Share Price Return
5.00%

4.00%

3.00%

2.00%

1.00%

0.00%
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31
-1.00%

-2.00%

-3.00%

-4.00%

-5.00%
2012-13 2013-14 2014-15 2015-16 2016-17 Linear (2013-14)

Source – Self Calculated

 Hero Motocorp Ltd.
DPS EPS
90.00 200
80.00
70.00 150
60.00
50.00 100
40.00
50
30.00
20.00 0
10.00 2012-13 2013-14 2014-15 2015-16 2016-17
0.00
2012-13 2013-14 2014-15 2015-16 2016-17

Dividend Payout Ratio Dividend Yield

70% 4.00%
60% 3.50%
50% 3.00%
2.50%
40%
2.00%
30%
1.50%
20% 1.00%
10% 0.50%
0% 0.00%
2012-13 2013-14 2014-15 2015-16 2016-17 2012-13 2013-14 2014-15 2015-16 2016-17
Source – Self Calculated
 Hero Motocorp Ltd.
Share Price Return
10.00%

8.00%

6.00%

4.00%

2.00%

0.00%
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31
-2.00%

-4.00%

-6.00%

-8.00%
2012-13 2013-14 2014-15 2015-16 2016-17 Linear (2013-14)

Source – Self Calculated

 Glenmark Pharmaceuticals Ltd.
DPS EPS
2.5 80

2 60

1.5 40

1 20

0.5 0
2012-13 2013-14 2014-15 2015-16 2016-17
0
2012-13 2013-14 2014-15 2015-16 2016-17

Dividend Payout Ratio Dividend Yield

16.00 0.45
14.00 0.40
12.00 0.35
0.30
10.00
0.25
8.00
0.20
6.00 0.15
4.00 0.10
2.00 0.05
0.00 0.00
2012-13 2013-14 2014-15 2015-16 2016-17 2012-13 2013-14 2014-15 2015-16 2016-17
Source – Self Calculated
Glenmark Pharmaceuticals Ltd.
Share Price Return
8.00%

6.00%

4.00%

2.00%

0.00%
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30

-2.00%

-4.00%

-6.00%
2012-13 2013-14 2014-15 2015-16 2016-17 Linear (2012-13)

Source – Self Calculated

References

 Annual reports of the companies

 The graphs and calculations are self-done