Top 3 Indian Dividend Stocks To Consider

The Indian market has climbed 1.8% in the last 7 days, led by the Financials sector with a gain of 2.2%, and is up 46% over the last 12 months. In this robust environment, selecting dividend stocks that offer steady income and potential for growth can be a prudent strategy for investors looking to capitalize on forecasted earnings growth of 17% annually.

Top 10 Dividend Stocks In India

Name	Dividend Yield	Dividend Rating
Castrol India (BSE:500870)	3.04%	★★★★★★
Balmer Lawrie Investments (BSE:532485)	4.00%	★★★★★★
D. B (NSEI:DBCORP)	5.10%	★★★★★☆
HCL Technologies (NSEI:HCLTECH)	3.02%	★★★★★☆
VST Industries (BSE:509966)	3.12%	★★★★★☆
Indian Oil (NSEI:IOC)	8.07%	★★★★★☆
Balmer Lawrie (BSE:523319)	3.08%	★★★★★☆
Redington (NSEI:REDINGTON)	3.06%	★★★★★☆
Bank of Baroda (NSEI:BANKBARODA)	3.02%	★★★★★☆
PTC India (NSEI:PTC)	3.79%	★★★★★☆

Click here to see the full list of 18 stocks from our Top Indian Dividend Stocks screener.

Here we highlight a subset of our preferred stocks from the screener.

Coal India (NSEI:COALINDIA)

Simply Wall St Dividend Rating: ★★★★☆☆

Overview: Coal India Limited, along with its subsidiaries, is involved in the production and marketing of coal and coal products in India and has a market cap of ₹3.32 trillion.

Operations: Coal India Limited generates revenue primarily from its coal mining and services segment, which amounted to ₹1.35 trillion.

Dividend Yield: 4.7%

Coal India has shown significant earnings growth, reporting net income of ₹109.59 billion for Q1 2024-25. However, its dividend payments are not well covered by free cash flows, evidenced by a high cash payout ratio of 1226%. Despite this, the company offers an attractive dividend yield of 4.74%, placing it in the top tier among Indian dividend payers. Recent strategic alliances and consistent production growth bolster its long-term potential for dividends.

• Click to explore a detailed breakdown of our findings in Coal India's dividend report.
• Upon reviewing our latest valuation report, Coal India's share price might be too pessimistic.

PTC India (NSEI:PTC)

Simply Wall St Dividend Rating: ★★★★★☆

Overview: PTC India Limited, with a market cap of ₹60.99 billion, engages in the trading of power across India, Nepal, Bhutan, and Bangladesh through its subsidiaries.

Operations: PTC India Limited generates revenue primarily from power trading, amounting to ₹159.67 billion, and its financing business, which contributes ₹7.35 billion.

Dividend Yield: 3.8%

PTC India reported Q1 2024 net income of ₹1.74 billion, up from ₹1.30 billion a year ago, with earnings per share increasing to ₹5.87 from ₹4.39. Despite this growth, the company's dividend history has been volatile over the past decade. However, PTC's dividends are well-covered by both earnings (payout ratio: 54%) and cash flows (cash payout ratio: 9.4%). The recent board changes and regulatory issues may impact future stability but do not currently affect dividend sustainability directly.

• Click here to discover the nuances of PTC India with our detailed analytical dividend report.
• Our valuation report unveils the possibility PTC India's shares may be trading at a premium.

Ujjivan Small Finance Bank (NSEI:UJJIVANSFB)

Simply Wall St Dividend Rating: ★★★★☆☆

Overview: Ujjivan Small Finance Bank Limited provides various banking and financial services in India, with a market cap of ₹84.57 billion.

Operations: Ujjivan Small Finance Bank generates revenue from three main segments: Treasury (₹7.58 billion), Retail Banking (₹58.71 billion), and Wholesale Banking (₹1.44 billion).

Dividend Yield: 3.4%

Ujjivan Small Finance Bank's dividend payments, covered by a low payout ratio of 22.6%, are sustainable but have been unreliable over the past two years. Despite trading at 38.5% below estimated fair value and having strong earnings growth of 43.2% per year over five years, the bank's high level of bad loans (2.3%) and volatile dividend history pose risks for investors seeking stable returns. Recent earnings showed a slight decline in net income to ₹3 billion from ₹3.24 billion year-over-year.

• Delve into the full analysis dividend report here for a deeper understanding of Ujjivan Small Finance Bank.
• The valuation report we've compiled suggests that Ujjivan Small Finance Bank's current price could be quite moderate.

Next Steps

• Click here to access our complete index of 18 Top Indian Dividend Stocks.
• Already own these companies? Link your portfolio to Simply Wall St and get alerts on any new warning signs to your stocks.
• Join a community of smart investors by using Simply Wall St. It's free and delivers expert-level analysis on worldwide markets.

Want To Explore Some Alternatives?

• Explore high-performing small cap companies that haven't yet garnered significant analyst attention.
• Fuel your portfolio with companies showing strong growth potential, backed by optimistic outlooks both from analysts and management.
• Find companies with promising cash flow potential yet trading below their fair value.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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