<div id="readability-page-1"><div>India's top ten information technology companies listed on the Nifty IT index paid a combined dividend of Rs 1 lakh crore in fiscal year 2026, a record high that rewarded shareholders even as the sector navigated one of its most challenging environments in recent memory. The bumper payout came against a backdrop of deepening fears that artificial intelligence will disrupt traditional software service models, weak earnings outlooks, and increasingly cautious client spending.The combined dividend payout for FY26 stood at Rs 1.01 lakh crore, up 3.34 percent from Rs 96,782 crore in FY25 and Rs 69976 crore disbursed in FY24.<figure></figure>Not all firms moved in the same direction, however. Tata Consultancy Services and Coforge were the only two companies to pay lower dividends during the fiscal, while HCL Technology held its payout steady. The remaining seven — Infosys, LTIMindtree, Mphasis, Oracle Financial Services, Persistent Systems, Tech Mahindra, and Wipro — all raised their dividends from a year ago.TCS, the index's largest constituent, saw its dividend decline 12.7 percent to Rs 39,820 crore in FY26 from Rs 45,588 crore in FY25. Coforge recorded a steeper fall, with its combined payout dropping over 20 percent to Rs 404 crore from Rs 509 crore in the previous fiscal. HCL Technology held its dividend unchanged at Rs 16,290 crore.Among those raising payouts, Wipro stood out as the most aggressive, hiking its dividend by 84 percent to Rs 11,538 crore from Rs 6,283 crore in FY25. The company also announced a share buyback worth Rs 15,000 crore, reinforcing its capital return commitment. Oracle Financial Services was the second biggest mover, raising its combined dividend by over 51 percent to Rs 3,480 crore from Rs 2,300 crore in FY25.Persistent Systems, LTIMindtree, and Tech Mahindra followed with increases of 15.7 percent, 15.4 percent, and 12.4 percent respectively. Persistent Systems paid Rs 631 crore against Rs 546 crore a year ago, while LTIMindtree's combined payout came in at around Rs 2,220 crore compared with Rs 1,924 crore. Tech Mahindra's total dividend stood at around Rs 4,997 crore, up from Rs 4,406 crore in FY25. Mphasis and Infosys each recorded around 9 percent growth in dividends, with Mphasis paying Rs 1,183 crore against Rs 1,084 crore and Infosys disbursing Rs 19,460 crore compared with Rs 17,854 crore a year ago.The generous payouts, however, have done little to shield investors from steep stock declines over the past year. TCS was the biggest loser, falling over 34 percent, followed by HCL Technology and Infosys, which dropped 30 percent and 29 percent respectively. Coforge and Wipro each declined 23 percent, while LTIMindtree and Mphasis fell 20 percent and 18 percent. Persistent Systems and Tech Mahindra each lost 14 percent. The Nifty IT Index as a whole dropped 26.6 percent over the period, sharply underperforming the Nifty 50, which fell just 4 percent.The earnings season offered little by way of comfort either. In its latest sector note, Kotak Institutional Equities described fourth quarter FY26 results as mildly disappointing after a period of relative stability in the preceding quarters. The brokerage flagged a combination of marginal misses on growth estimates, underwhelming deal wins, guidance that fell short of expectations, and the emerging reality of revenue deflation driven by generative AI as factors that will keep pressure on valuations intact.While IT firms are making reasonable progress in capturing AI-driven opportunities, Kotak noted this is unlikely to fully offset the deflation headwinds, with high competitive intensity making it difficult to counter growth pressures. Margin headwinds, it added, remain manageable through further cost optimisation.On the revenue front, most companies marginally missed estimates, reflecting incremental stress in demand. Among Tier-1 players, TCS led with sequential revenue growth of 1.2 percent, while Tech Mahindra grew 0.6 percent. Infosys, HCL Technology, and Wipro each saw sequential revenue declines. Mid-tier firms broadly outperformed their larger peers, posting growth of 1.2 to 3.4 percent, with the exception of Hexaware, which declined on account of client-specific issues.Revenue growth guidance across most companies was subdued, falling short of market expectations that had anticipated some lift from easing tariff-related uncertainties. HCL Technology, Infosys, and Wipro all issued guidance below expectations, while Cognizant maintained its previous guidance range but signalled a tilt toward the lower end, contingent on an improvement in client spending.Kotak said the cautious outlook reflects multiple headwinds — AI-driven revenue deflation, pricing pressure from intense competition, macroeconomic uncertainty stemming from the West Asia conflict, and lingering client-specific challenges.</div></div>

India's top IT firms paid a record Rs 1 lakh crore in dividends for FY26, despite facing significant stock declines and challenging market conditions. While TCS and Coforge reduced their payouts, Wipro increased its dividend by 84% and announced a Rs 15,000 crore share buyback. The Nifty IT Index fell 26.6%, underperforming the Nifty 50. Earnings reports were disappointing, with many firms missing revenue estimates and issuing cautious guidance due to AI-driven deflation and competitive pressures.

India's top IT firms pay record Rs 1 lakh crore dividend even as stocks take a beating