8 Tata Group Stocks To Buy That Will Pay Dividends Soon, Q4 In Focus; Are You Invested?

Tata Group is exiting FY24 with a banger, as its listed companies are planning to pay huge dividends to investors. Dividends are like incentives in which listed companies reward their shareholders in the form of cash or stocks from their profitability of a respective financial year. A total of 11 stocks of Tata Group including its DVR will be rewarded with dividend payouts. However, only 8 of them have a buy rating as of now. The other three do not have analysts coverage and hence there is no investment call.

The eight hot Tata stocks to buy are TCS, Tata Motors, Trent, Tata Consumer Products, Tata Power, Tata Communications, Indian Hotels and Tata Elxsi.

1. Tata Consultancy Services (TCS):

CMP: Rs 3,827.45, Target: Rs 4700

The majority of brokerages are optimistic about TCS shares. UBS so far has kept a high target of Rs 4,700. The brokerage stated that TCS ended FY24 on a good note with remarkable deal wins and positive margin surprises in Q4. However, UBS also said that despite all the positives, TCS management appeared to be holding back on calling out growth revival. It added, "Conversion of large deal wins into revenue is a matter of time."

TCS has declared a final dividend of Rs 28 per share with a face value of Rs 1 each. Earlier, TCS paid a whopping 4,500% dividend aggregating to Rs 45 per share for FY24 in a series of interims.

2. Tata Communications:

CMP: Rs 1,754.95, Target Price: Rs 2,125

Tata's telecom stock has also recommended hefty dividend. The company has announced a final dividend of Rs 16.70 per share with a face value of Rs 10 each for FY24. This dividend, upon approval of the shareholders at the ensuing Annual General Meeting (AGM), shall be paid to eligible shareholders after its conclusion.

In the previous fiscal, Tata Communications paid up 210% dividend valuing to Rs 21 per share.

After Q4 results, Emkay Global said, "Scale and synergies can help improve margin to 23.4% by FY26, from 18.6% in Q4FY24. Our TP reduces to Rs2,125/share (11x Mar-26E EBITDA) from Rs2,225 as we cut our FY25/FY26E margin by 43/10bps on margin miss. We retain our ADD rating on the stock."

3. Tata Elxsi:

CMP: Rs 7,444.50, Target Price: Rs 9,000

Tata Elxsi announced that it will be considering the recommendation of dividend on April 23, if any, on the equity shares of the Company for FY24. Also, on April 23, 2024. The announcement will be alongside its Q4 results. In 2023, Tata Elxsi paid the highest dividend of Rs 60.60 dividend per share or 606% to its investors. This dividend was final.

Prabhudas Lilladher is currently among the only brokerages to recommend BUY on Tata Elxsi for near-term gains. The brokerage has kept an upside target of Rs 8,600 to Rs 9,000.

4. Tata Power:

CMP: Rs 428, Target Price: Rs 439

Powerhouse of the group, Tata Power is scheduled to meet on May 8, 2024, to recommend dividend and Q4 earnings for FY24.

JM Financial has set a target price of Rs 439 apiece with a BUY recommendation for the near term.

5. Tata Motors:

CMP: Rs 963.20, Target Price: Rs 1,075

Tata's automobile player, Tata Motors will announce its Q4 earnings on May 10. On this day, Tata Motors is also planning to recommend dividends, if any on the Ordinary Shares and 'A' Ordinary Shares in the Company for the financial year ended March 31, 2024, for the approval of the shareholders at the forthcoming 79th Annual General Meeting of the Company. In 2023, the company paid dividends of Rs 2 on ordinary shares and Rs 2.1 dividend on DVR shares. In the percentage terms, the dividend payout was 100% each.

Prabhudas Lilladher is the latest to recommend Tata Motors. It said, "We have increased our EV/EBITDA multiple for the India PV business to 13x to align it more closely with Maruti Suzuki. Consequently, our SoTP-based TP has been revised upwards to Rs. 1,075. However, given the stock's sharp runup over the last three months, we are downgrading our recommendation to 'ACCUMULATE' from 'Buy'."

6. Tata Consumer Products:

CMP: Rs 1,137.50, Target Price: Rs 1,370

Tata's FMCG giant, Tata Consumer Products has also fixed April 23 as the date to consider Q4 results and recommend final dividend for FY24. In 2023, the company paid a whopping 845% dividend amounting to Rs 8.45 per share.

Motilal Oswal in its note said, "Tata Consumer Products (TATACONS) posted a strong operating performance in 3QFY24," adding, " EBIT growth of 29% YoY was led by a healthy performance across categories." Meanwhile, revenue growth was aided by the Indian food and international beverages businesses. Also, the company expects to gain market share in the salt business.

Accordingly, Motilal Oswal has recommended BUY for a target price of Rs 1,370.

7. Trent:

CMP: Rs 4,152.55, Target: Rs 4,200

Trent will announce its Q4 results on April 29, 2024. On this day, Trent is also planning to recommend dividends if any. In 2023, the company paid dividends up to 220% amounting to Rs 2.20 per share.

According to Motilal Oswal, Trent's growth opportunity and improving store metrics offer upside potential. Hence, the brokerage has suggested a BUY rating with a revised target price of Rs 4,200.

8. Indian Hotels:

CMP: Rs 596.65, Target Price: Rs 625

This hotel giant is going to announce its Q4 and new dividend recommendations on April 24.

Vaishali Parekh, Vice President- Technical Research at Prabhudas Lilladher said, "The stock has indicated a negative divergence on the daily chart with the RSI slipping down with a negative trend reversal pattern." Parekh added, "The stock has witnessed some profit booking and is expected to slide till 555-545 zone which is near the significant 50EMA level. Our view shall be negated once a decisive breach above 625 is confirmed where the bias shall turn positive overall."

Disclaimer: The recommendations made above are by market analysts and are not advised by either the author or Greynium Information Technologies. The author, the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.