Dividend Snapshot
Hisar Metal Industries Limited (NSE: HISARMETAL | BSE: 590018 | ISIN: INE598C01011) has recommended a final dividend of ₹1 per equity share for the financial year ended 31 March 2026, headlined as a 10% payout on the ₹10 face value. On the market price of roughly ₹152, that headline percentage translates into a real cash yield of only about 0.66%.
Market price is a live figure and moves daily; the yield shown uses an approximate market price near the announcement window and is not the company's disclosure.
Dividend Announcement Summary
At its board meeting held on 30 May 2026, the Board of Directors of Hisar Metal Industries approved the audited results for the quarter and year ended 31 March 2026 and recommended a dividend of ₹1 per equity share of ₹10 each (10%) for FY2025-26. The dividend is subject to shareholder approval at the ensuing Annual General Meeting.
The company confirmed that its 36th Annual General Meeting is scheduled for Friday, 28 August 2026 at the registered office in Hisar, Haryana. The statutory auditors, M/s Ram Sanjay & Co., issued an unmodified (clean) audit opinion on the standalone financial statements.
What the Board Recommended
- Final dividend of ₹1 per share (10% of face value)
- Payout tied to FY ended 31 March 2026
- Requires approval at the AGM on 28 August 2026
Reporting Basis
- Company reports on a standalone basis only (single segment, no subsidiaries reported)
- Consolidated statements are therefore Not Disclosed by Company
- All analysis below uses the audited standalone FY2025-26 results
Key Dates Timeline
The company disclosed only the announcement and AGM dates. The record date, ex-date and payment date were not stated in the board-meeting outcome filing. Based on the company's multi-year pattern, these have historically fallen in early September (record/ex) with payment in October, but that is an observation, not a confirmed schedule.
Investors should confirm the record and ex-dates against the official NSE/BSE corporate-action circular once published. Eligibility depends on holding shares before the ex-date once it is notified.
Dividend Yield Analysis
This is where the headline can mislead. A "10% dividend" sounds large, but that 10% is calculated on the ₹10 face value, not on the market price you actually pay. The cash you receive is fixed at ₹1 per share.
The Face-Value Illusion
- Headline percentage: 10% (of ₹10)
- Cash per share: ₹1.00
- Real yield on CMP ~₹152: ~0.66%
- The headline is roughly 15x the actual yield
Why the Yield Is This Low
The low yield is not caused by a weak share price. It is because the company has kept the absolute dividend flat at ₹1 for many years while the share price re-rated far higher. A fixed rupee payout on a much larger price simply produces a small percentage yield.
For context, a purely income-focused investor buying at ~₹152 locks in about ₹0.66 of annual dividend for every ₹100 invested before tax. The investment case here, if any, rests on capital appreciation and business turnaround, not on dividend income.
Dividend History Analysis
Hisar Metal has one of the more consistent, if unexciting, dividend records among micro-cap steel names. Public data shows a flat ₹1 per share paid every year since at least 2017 (and, per some records, since 2012), with no cuts and no suspensions.
| Financial Year | Dividend Per Share | % | Ex-Date (as reported) |
|---|---|---|---|
| FY2025-26 | ₹1.00 | 10% | Not Disclosed by Company |
| FY2024-25 | ₹1.00 | 10% | 08 Sep 2025 |
| FY2023-24 | ₹1.00 | 10% | 09 Sep 2024 |
| FY2022-23 | ₹1.00 | 10% | 11 Sep 2023 |
| FY2021-22 | ₹1.00 | 10% | 09 Sep 2022 |
| FY2020-21 | ₹1.00 | 10% | 08 Sep 2021 |
| FY2019-20 | ₹1.00 | 10% | 17 Sep 2020 |
| FY2018-19 | ₹1.00 | 10% | 12 Sep 2019 |
| FY2017-18 | ₹1.00 | 10% | 12 Sep 2018 |
History figures are compiled from public exchange and data-aggregator records and are not part of the current filing.
Classification: Consistent Payer (No Growth)
The dividend is highly consistent in that it has never been missed. But it is stagnant: the absolute payout has not risen in roughly a decade, and there have been no special dividends. Income investors get reliability but no growth; the yield keeps shrinking as the share price rises.
Financial Performance Analysis
On the surface, FY2025-26 looks like a growth year: net profit rose to ₹3.38 Cr from ₹3.18 Cr. But the operating engine tells a different, less flattering story.
| Metric (₹ Cr) | FY2024-25 | FY2025-26 | Change |
|---|---|---|---|
| Revenue from operations | 244.83 | 261.96 | +7.0% |
| Operating EBITDA (ex other income) | 14.94 | 12.99 | -13.1% |
| EBIT (PBT + finance cost) | 12.94 | 11.44 | -11.6% |
| Finance cost | 8.67 | 6.88 | -20.6% |
| Profit before tax | 4.27 | 4.56 | +6.8% |
| Net profit (PAT) | 3.18 | 3.38 | +6.3% |
The Operating Leverage Red Flag
Revenue grew 7%, yet operating EBITDA fell 13% and EBIT fell nearly 12%. The entire increase in reported profit came from a 21% drop in finance costs, not from the business earning more. Strip out the interest saving and the core operation went backwards.
Where the Margin Went
Material cost (including inventory change) rose from 76.5% to 79.9% of revenue. That ~3.4 percentage-point squeeze pushed the EBITDA margin down from 6.10% to 4.96%. Net profit margin is razor-thin at 1.29%.
Cash Flow Analysis
Reported profit is an accounting opinion; cash is fact. Here the cash picture is better than the profit optics in one respect and worth scrutinising in another.
Is the Dividend Funded by Real Cash?
Yes. The ₹0.54 Cr dividend is comfortably covered by ₹6.06 Cr of free cash flow (about 11x) and does not require borrowing or asset sales to fund. The payout is small enough to be a rounding item in the cash flows.
The Detail Behind the Cash
OCF of ₹10.58 Cr comfortably exceeds PAT, which is a positive sign of cash conversion. But note the large working-capital swings: a big ₹9.33 Cr inventory release boosted operating cash, while a ₹19.16 Cr fall in trade payables pulled it the other way, partly funded by higher short-term borrowings. OCF also declined from ₹13.21 Cr in FY2024-25. Cash generation is real, but it is being shaped heavily by working-capital timing rather than by rising operating profit.
Balance Sheet Strength
This is the weakest link in the story. Hisar Metal carries meaningful debt relative to its size and earnings, and that debt is rising.
Reading the Leverage
Total debt rose 23% year-on-year, driven mainly by higher short-term borrowings (working-capital funding). Net debt of ₹81.92 Cr exceeds the company's entire equity base. Interest coverage of just 1.66x means operating profit covers the interest bill only 1.66 times — a thin cushion. Curiously, reported finance cost fell 21% even as debt rose 23%, a divergence worth watching in the full annual report.
Dividend Sustainability Analysis
Because the payout is so small, the four standard coverage tests all pass comfortably — the question is not affordability but whether the payout is meaningful at all.
Verdict: Sustainable (but token)
On all four tests — earnings, OCF, FCF and liquidity — the dividend is easily covered. It consumes only 16% of profit and less than a tenth of the annual interest bill. The realistic risk is not that the dividend is unaffordable, but that it stays frozen at ₹1 while the business carries rising debt and shrinking operating margins. Sustainability is high; relevance to an income investor is low.
Peer Comparison
Against listed stainless-steel pipe and tube peers, Hisar is a micro-cap outlier: far smaller, lower-margin and more leveraged, yet its dividend yield actually screens slightly higher because peers pay even less relative to their prices.
| Company | Approx. Mkt Cap | Div Yield | ROE | P/E |
|---|---|---|---|---|
| Hisar Metal | ~₹82 Cr | ~0.66% | ~5% (FY26) | ~24x |
| Ratnamani Metals & Tubes | ~₹16,468 Cr | ~0.56% | Higher | ~38x |
| Venus Pipes & Tubes | ~₹3,000 Cr | ~0.08% | ~17-19% | ~28-33x |
Peer figures are from public market-data sources on varying dates and are indicative, not exact same-day comparisons.
What the Comparison Shows
None of these are high-yield stocks — the sector reinvests rather than distributes. Where Hisar stands apart is on quality metrics: its FY26 ROE (~5%) and margins are well below the better-run peers such as Venus Pipes (ROE ~17-19%). Hisar's marginally higher yield is a function of a flat rupee dividend on a smaller, cheaper stock — not of superior distribution policy.
Promoter Impact Analysis
Promoters hold the majority of the company, so the bulk of any dividend flows back to them — though in absolute terms the sums are modest.
Reading the Distribution
Of the ₹0.54 Cr total payout, roughly ₹0.33 Cr goes to promoters and ₹0.21 Cr to public shareholders. Because the payout is tiny relative to the promoter's stake value, the dividend is unlikely to be a primary cash-extraction route — it reads more as a signal of continuity than as a wealth-transfer mechanism. Promoter shares are reported as unencumbered (no pledge), which is a positive governance signal.
Taxation Analysis
Since the abolition of the Dividend Distribution Tax in FY2020-21, dividends are fully taxable in the hands of the shareholder at their applicable income-tax slab rate. There is no separate concessional rate.
Key Tax Rules (FY2025-26)
- Dividend taxed at your slab rate (5% / 20% / 30% etc.)
- TDS u/s 194 at 10% only if total dividend from the company exceeds ₹10,000 in a year (threshold raised from ₹5,000 in Budget 2025)
- No PAN → TDS at 20%
- Interest on money borrowed to buy shares is deductible, capped at 20% of dividend income (Section 57)
Worked Example (30% slab)
- Holding: 1,000 shares × ₹1 = ₹1,000 gross dividend
- TDS: ₹0 (below the ₹10,000 threshold)
- Tax at 30% slab: ₹300
- Net in hand: ₹700
- Post-tax yield on ~₹152: ~0.46%
A practical point for retail holders: you would need to hold more than 10,000 shares of Hisar Metal (about ₹15 lakh at current prices) before TDS is even triggered on this dividend. Tax rules are general and not personalised advice.
Key Risks
1. High and Rising Leverage
Net debt of ₹81.92 Cr exceeds total equity; total borrowings rose 23% in FY26. Interest coverage is only 1.66x.
2. Margin Compression
Material cost climbed to 79.9% of revenue; operating EBITDA fell 13% despite 7% revenue growth. Net margin is a thin 1.29%.
3. Profit Reliant on Interest Savings
FY26 profit growth came entirely from lower finance costs. If rates or debt rise, the earnings cushion could reverse quickly.
4. Commodity & Input Price Cyclicality
As a stainless-steel converter, profitability is exposed to nickel and steel price swings that it may not fully pass through to customers.
5. Low Liquidity & Micro-Cap Volatility
Thin trading volumes and a small ~₹82 Cr market cap can mean sharp price moves and difficulty entering or exiting positions.
6. Working-Capital Dependence
Cash generation is heavily influenced by inventory and payables swings; a reversal in working-capital timing could pressure operating cash.
What To Monitor
1. Debt Trajectory
Whether total borrowings and short-term debt stabilise or keep climbing, and how interest coverage evolves.
2. EBITDA Margin Recovery
Whether the operating margin recovers above the FY26 level of 4.96% or the material-cost squeeze persists.
3. Finance Cost vs Debt Divergence
The full annual report's explanation for finance cost falling 21% while debt rose 23%.
4. Dividend Policy Signals
Any move to raise the flat ₹1 payout, or a formal dividend-distribution policy, would change the income thesis.
5. Capex & Capacity Utilisation
How the FY26 capex of ₹4.52 Cr and capital work-in-progress convert into revenue and margins.
6. Record & Ex-Date Confirmation
The official NSE/BSE corporate-action notice fixing the record and ex-dates for this dividend.
Conclusion
Hisar Metal Industries' FY2025-26 dividend of ₹1 per share is best understood as a gesture of continuity rather than an income opportunity. The "10%" headline is a face-value figure; the real cash yield is about 0.66%, and the payout has not grown in roughly a decade.
Positives
- Unbroken dividend record for ~10 years
- Payout easily covered — 6.4x by earnings, 11x by FCF
- Positive free cash flow of ₹6.06 Cr
- Promoter shares reported unencumbered
Negatives
- Operating EBITDA fell 13%; profit growth was interest-driven
- Net debt of ₹81.92 Cr exceeds equity
- Interest coverage thin at 1.66x
- Yield of ~0.66% offers little to income investors
The dividend is sustainable, but the more important story sits in the profit-and-loss and balance sheet: a business growing its top line while its operating margin and leverage move the wrong way. We present the positives, negatives, risks and monitoring factors so you can weigh them yourself.
Frequently Asked Questions
What dividend has Hisar Metal Industries announced for FY2025-26?
What is the actual dividend yield of Hisar Metal shares?
Why is the yield so low if the dividend is "10%"?
What is the record date for the Hisar Metal dividend?
What is the ex-date for this dividend?
When will the dividend be paid?
Who is eligible to receive the dividend?
How is the Hisar Metal dividend taxed?
Is the Hisar Metal dividend sustainable?
What is Hisar Metal's dividend history?
Did Hisar Metal's profit really grow in FY2025-26?
How much of the dividend goes to promoters?
What should investors monitor going forward?
Disclaimer
This article is for informational and educational purposes only and does not constitute investment advice, a recommendation, or an offer to buy or sell any security. ShareBazaar Online is not a SEBI-registered investment adviser. Figures relating to the dividend, financial year, face value and AGM are drawn from the company's board-meeting outcome and audited standalone results dated 30 May 2026; market prices, dividend history, shareholding and peer data are sourced from public exchange filings and third-party data providers and may differ across sources and dates. Market prices are indicative and change continuously. Financial ratios are computed by ShareBazaar Online from disclosed figures and may differ from other portals depending on methodology. Record, ex- and payment dates were not disclosed in the filing and must be confirmed on the official NSE/BSE corporate-action circular. Please verify all figures independently and consult a qualified, registered financial adviser and tax professional before making any investment decision. Investments in equity shares are subject to market risks, including the possible loss of principal.