Why is Majesco giving so much dividend?
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Why is Majesco giving so much dividend?
It is a signal for investors to sell, rather than buy into the company, they said. Majesco made nearly ₹3,200 crore after selling its stake in its US subsidiary, Mastek. The majority of its dividend came from the stake sale and with the company’s profit distributed as the dividend to the shareholders.
Majesco is still a bargain right now according to my price multiple model, which compares the company’s price-to-earnings ratio to the industry average. The stock’s ratio of 0.085x is currently well-below the industry average of 16.63x, meaning that it is trading at a cheaper price relative to its peers.
What will happen after Majesco dividend?
“Once the company pays the dividend, there will be nothing left in the company. It has cash of about Rs 103 crore and real estate of around Rs 70 crore—going by the annuity of Rs 5 crore it generates.
Why do companies give interim dividends?
Companies declare and distribute an interim dividend during an exceptional earnings season or when legislation makes it more advantageous to do so. A final or regular dividend can be a set amount that is paid every quarter, six months or year. It can be a percentage of net income or earnings.
What do you mean by interim dividend?
An interim dividend is a dividend payment made before a company’s annual general meeting and before the release of final financial statements. This declared dividend usually accompanies the company’s interim financial statements and are paid out monthly or quarterly.
Is Majesco dividend a trap?
Majesco’s Dividend Trap Company declared a massive dividend of INR 974/ share for FY20. Stock also showed a good rally in July from ~ INR 400 levels to current levels of ~INR 1000.
Should we buy Majesco for dividend?
Majesco has also launched a Rs 631 crore buyback program to return value to its shareholders. This is good news for existing investors but new investors should be wary of buying Majesco shares. After the dividend payout, the company will only have Rs 103 crore as cash and real estate of Rs 70 crore.
Who is eligible for interim dividend?
In accordance with the provisions of sub-section (3) of section 123,the Board of Directors of a company may declare interim dividend during any financial year out of the surplus in the profit and loss account and out of profits of the financial year in which such interim dividend is sought to be declared.
How do you declare an interim dividend?
Interim Dividend can be declared from the surplus in the Profit and Loss account and out of profits of the current financial year. If the company is in losses during the current FY, then the Rate of Dividend will be the average dividends declared by the company during the 3 immediately preceding years.
Is Majesco dividend taxable?
NEW DELHI: The record Rs 974 dividend announced by insurance technology firm Majesco Ltd is a signal for investors to sell, rather than buy. They pay only 10-15\% tax on capital gains while the dividend they get will be taxed at 30-40\%. There will also be 10\% TDS on the dividend, so there is no escaping the tax.