Hexaware ₹9.50 Dividend 2026 — Yield, Record Date 26 Oct, Payout Analysis

Hexaware Technologies has now declared ₹18.00 per share in interim dividends for CY2026 (₹8.50 + ₹9.50). That matches 92.9% of the company's CY2024 earnings per share and runs ahead of its current annualised earnings pace — a sharp step-up from the roughly 45% payout seen in CY2024. This is the single most important fact in the Hexaware dividend story.

Hexaware Technologies Limited is a global IT services and digital solutions company offering cloud, data, AI, and business-process services across BFSI, healthcare, manufacturing, and travel verticals. The company was taken private by Carlyle Group affiliate CA Magnum Holdings in 2020 and was re-listed on the NSE and BSE in February 2025. It reports financials on a calendar-year (December year-end) basis, unlike most Indian peers that follow an April–March year.

Hexaware is a debt-free company with a reported return on equity of around 25% and return on capital employed near 34.7%. CY2024 delivered an EBITDA margin of 15.9% and EPS of ₹19.37. In CY2026, quarterly reported EPS has run at ₹3.51 (Q1) and ₹3.28 (Q2), after a weak Dec-2025 quarter (₹1.65) hit by a one-time charge. The annualised H1-CY2026 run-rate works out to roughly ₹13.6 per share.

The defining feature of this Hexaware dividend is escalation. Per-share interim payouts have climbed from ₹5.75 to ₹8.50 to ₹9.50 in under two years, while reported earnings have grown far more modestly. CY2026's combined ₹18.00 absorbs almost all of a single year's profit. For a debt-free, asset-light IT firm, funding this from internal accruals is feasible — but the pace is clearly set by a private-equity sponsor optimising cash returns, not by a conservative dividend policy. Investors should read the headline "950%" as a face-value artefact, not a measure of income.

With two interim dividends already declared in CY2026 totalling ₹18.00, Hexaware has established a semi-annual distribution rhythm. Whether this level is sustainable depends on earnings re-accelerating toward the CY2024 EPS of ₹19.37 and on cash generation keeping pace with distribution. The company has not disclosed a formal forward dividend policy or any guidance on CY2027 payouts, so future distributions remain undisclosed. Readers should track quarterly earnings and the cash balance rather than extrapolate the current run-rate.

On 20 October 2026, the Board of Hexaware Technologies, through a circular resolution, declared a second interim dividend of ₹9.50 per equity share (950% of the ₹1 face value) for the financial year 2026, following its earlier intimation of 15 October 2026. The record date for determining eligible shareholders is 26 October 2026 and the payment date is 07 November 2026. The disclosure was made under Regulation 30 and Regulation 42 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

This is the core correction retail investors need. The "950%" figure is calculated on the ₹1 face value, not the market price. On the actual trading price of about ₹591, the real cash return from this single ₹9.50 dividend is just 1.61%.

Since re-listing in February 2025, Hexaware has been a consistent and rising interim-dividend payer, with no cuts or suspensions in its short listed history. Per-share interim payouts rose from ₹5.75 (both CY2025 interims) to ₹8.50 and now ₹9.50 in CY2026 — a roughly 57% increase in the per-share interim level within a year. On available listed history the company reads as a consistent, growth-oriented payer, though its record is too short to label it a long-term dividend compounder.

This is where the numbers tighten. CY2026's combined ₹18.00 dividend equals 92.9% of CY2024 EPS (₹19.37) and about 132% of the annualised H1-CY2026 run-rate (~₹13.6). In CY2024, the ₹8.75 dividend was only 45% of earnings — a comfortable payout. The payout ratio has therefore roughly doubled in a single cycle, while revenue grew a steadier ~13–15%. Dividends are growing faster than profits.

Reported profit is an opinion; cash is a fact. Hexaware's cash and equivalents fell from ₹1,977 crore at December 2024 to roughly ₹686 crore at the latest balance-sheet date — a 65% drawdown. While some of this reflects working-capital and investment movements, the rising dividend is a visible claim on that cash. The full CY2026 interim outflow of about ₹1,096 crore exceeds the latest cash balance, meaning the company is funding distributions from ongoing operating cash generation, not from a large stockpile. CY2024 operating-cash-to-EBITDA conversion was disclosed at about 74.5%.

On the positive side, Hexaware carries zero debt, so the dividend is not being funded by borrowing — a key integrity check that the company passes. ROCE near 34.7% and ROE around 25% indicate a capital-efficient business. The watch-point is liquidity depletion: the cash buffer has shrunk materially, reducing the cushion available for future distributions, buybacks, or acquisitions without relying on each quarter's fresh cash generation.

Four-test sustainability scorecard

• Earnings coverage: ~0.75x on annualised run-rate EPS, ~1.08x on CY2024 EPS — thin
• Debt check: Zero debt, dividend not borrowed — pass
• Cash coverage: Latest cash covers this single payout ~1.19x but only ~0.63x the full CY2026 interims — tight
• Earnings trend: Growing, but payout is outpacing profit growth — watch

Verdict: Conditionally Sustainable. The debt-free balance sheet and high return ratios support the dividend, but near-100% payout on a shrinking cash base means sustainability depends on earnings re-accelerating and operating cash generation holding up.

With a 74.3% promoter stake held by Carlyle affiliate CA Magnum Holdings, the overwhelming majority of every rupee distributed flows to the sponsor. From this single ₹9.50 dividend, the promoter group receives an estimated ₹430 crore; across both CY2026 interims, roughly ₹814 crore. This is a legitimate, pro-rata benefit available to all shareholders — but it frames the aggressive payout as consistent with a private-equity owner extracting cash returns ahead of a possible future stake sell-down. Minority shareholders receive the same per-share dividend, just on a far smaller base.

Under current Income Tax Act rules, dividends are taxed in the hands of the shareholder at their applicable slab rate. The company deducts TDS at 10% under Section 194 when total dividend paid to a resident shareholder in a financial year exceeds ₹10,000 (a valid Form 15G/15H or lower-deduction certificate can reduce this). TDS is a credit, not an extra tax.

Worked example — 1,000 shares at ₹9.50

• Gross dividend: ₹9,500
• TDS @10%: Nil on this payout alone (below the ₹10,000 Section 194 threshold; TDS applies once cumulative FY dividends from the company cross ₹10,000)
• Tax at 30% slab: ₹2,850
• Net in hand: ₹6,650
• Post-tax effective yield at CMP: ~1.13%

• Payout outpacing profit: CY2026 dividends near ~93% of CY2024 EPS leave little retained-earnings buffer if growth stalls.
• Cash depletion: Cash fell ~65% from ₹1,977 cr to ~₹686 cr, reducing the cushion for future payouts.
• IT demand cyclicality: Discretionary tech spend by BFSI and enterprise clients can soften with global macro conditions, pressuring earnings that fund the dividend.
• Promoter overhang: Carlyle's 74.3% stake creates a potential future sell-down overhang that can weigh on the share price (and hence yield).
• Currency and margin risk: A large share of revenue is USD-denominated; rupee and wage-cost movements can swing margins and distributable profit.

• Quarterly EPS trajectory: Does reported EPS move back toward the ₹19+ annual level that would comfortably cover an ₹18 dividend?
• Cash balance trend: Whether the cash buffer stabilises or keeps declining after each distribution.
• Operating cash conversion: Sustained OCF-to-EBITDA above ~70% is what funds the payout.
• Revenue growth and deal wins: USD revenue growth, large-deal TCV, and attrition as leading indicators of future profit.
• Promoter stake actions: Any block deals or offer-for-sale by Carlyle that signal a change in ownership intent.

Hexaware Technologies' second interim dividend of ₹9.50 brings CY2026 interim payouts to ₹18.00 — a genuinely rising distribution from a debt-free, high-return IT business. The honest counterweight is the arithmetic: the real yield is just 1.61% on this payout (about 3% for the year), the payout ratio has climbed to near 93% of CY2024 EPS, and the cash balance has shrunk sharply. The dividend is backed by a clean balance sheet but is being distributed at close to the limit of current earnings. The strengths (no debt, strong ROCE, consistent growth in DPS) and the cautions (high payout, cash drawdown, promoter concentration) are laid out above for you to weigh. This is analysis, not advice.