High dividend stocks in India remained an important source of shareholder returns in FY26, with companies across metals, mining, oil and gas, power financing, consumer goods and electricity transmission making sizeable cash distributions.
This article covers the top 10 high dividend stocks in India for FY26, their dividend payouts, financial performance, key business drivers and risks, along with the factors investors should track in FY27. Among these companies, Vedanta recorded the highest dividend at ₹34 per share, followed by Coal India at ₹26.50 and HPCL at ₹24.25.
Table of Contents
- Top 10 High Dividend Stocks in India FY26
- How to Assess High Dividend Stocks
- Detailed Analysis of the Top 10 Dividend Stocks
- Comparing the Top Dividend Stocks in India
- Who Should Consider High-Dividend Stocks?
- What Makes a Dividend Sustainable?
- Key Risks for Dividend Investors
- What Investors Should Track in FY27
- Conclusion
- Where to Analyse Dividend Stocks for Free
Based on FY26 dividend distributions, Vedanta recorded the highest dividend per share among the companies covered, followed by Coal India and HPCL.
| Company |
FY26 dividend per share |
| Vedanta |
₹34.00 |
| Coal India |
₹26.50 |
| HPCL |
₹24.25 |
| Power Finance Corporation |
₹18.55 |
| REC |
₹18.55 |
| Bharat Petroleum Corporation |
₹17.50 |
| ITC |
₹14.50 |
| ONGC |
₹13.25 |
| Power Grid Corporation of India |
₹9.00 |
| Indian Oil Corporation |
₹8.25 |
This ranking is based on dividend per share, not dividend yield. Dividend yield changes with the prevailing market price of a stock, so the same dividend can produce different yields at different share prices.
Dividend per share is only the starting point when comparing the best dividend stocks in India for 2026. A large payout may reflect strong and sustainable cash generation, but it may also arise from unusually favourable commodity prices, refining margins or other temporary conditions.
Investors should therefore examine five questions:
- Is the dividend supported by recurring earnings?
- Is the company generating sufficient free cash flow after capital expenditure?
- Is debt increasing despite large shareholder distributions?
- Does the business need substantial capital for future expansion?
- Is the payout dependent on cyclical commodity prices, regulated returns or government policy?
The source of the dividend is particularly important. ITC and POWERGRID have different earnings profiles from Vedanta, ONGC or the oil-marketing companies. Similarly, PFC and REC depend on interest spreads, asset quality and capital adequacy rather than commodity prices.
The 10 companies in this list operate in different industries and carry different financial risks. Their FY26 dividends must therefore be assessed alongside their operating performance, balance sheets and future investment requirements.
Vedanta paid a total dividend of ₹34 per share in FY26, the highest payout per share among the companies covered in this analysis.
The full amount was distributed through three interim dividends.
| FY26 dividend |
Dividend per share |
| First interim dividend |
₹7 |
| Second interim dividend |
₹16 |
| Third interim dividend |
₹11 |
| Total FY26 dividend |
₹34 |
Vedanta’s official dividend history records all three FY26 interim payouts.
What supported Vedanta’s FY26 dividend?
Vedanta’s dividend-paying capacity is closely connected to cash generation from its aluminium, zinc, silver, oil and gas and other natural-resource businesses.
FY26 was also operationally significant for the company, with stronger production across several businesses and substantial capital expenditure directed towards capacity expansion and integration.
The company can generate considerable cash when commodity prices, production volumes and operating margins are favourable. However, this also means that its earnings and future dividend capacity can change materially when commodity cycles weaken.
What investors should track
- Aluminium, zinc and silver prices
- Production volumes across major businesses
- Operating costs and margins
- Operating and free cash flow
- Capital expenditure
- Net debt and leverage
- Capital allocation following the group’s restructuring
Investor takeaway: Vedanta offered the highest dividend per share in this list, but its future payouts remain sensitive to commodity prices, capital expenditure and leverage.
Also, check the Vedanta share price to assess how commodity prices, dividend payouts and leverage are reflected in its current market valuation.
Coal India paid a total dividend of ₹26.50 per share in FY26, making it one of the most prominent high dividend-paying PSU stocks covered in this article.
The company distributed the amount through multiple dividends during the year.
What supports Coal India’s dividends?
Coal India’s dividend capacity is supported by its operating scale, established mining operations and cash-generating characteristics.
As India’s largest coal producer, the company remains an important supplier to the power sector. Its profitability, however, can still vary with coal production, offtake, employee expenses and coal realisations.
Coal India’s majority government ownership is another factor investors should consider while assessing its capital allocation and shareholder distributions.
What investors should track
- Coal production
- Coal offtake
- E-auction volumes
- E-auction realisations
- Employee costs
- Capital expenditure
- Power-sector coal demand
- Progress in diversification
Over the longer term, investors also need to consider changes in India’s energy mix as renewable-energy capacity expands.
Investor takeaway: Coal India combines substantial operating cash generation with large shareholder distributions, but investors should assess the dividend alongside the long-term evolution of India’s energy sector.
Want to analyse Coal India’s stock performance alongside its dividend strength and cash-generating business model? Check the Coal India share price and relevant market metrics.
Hindustan Petroleum Corporation Limited paid a total FY26 dividend of ₹24.25 per share. This comprised an interim dividend of ₹5 per share and a final dividend of ₹19.25 per share.
| FY26 dividend |
Dividend per share |
| Interim dividend |
₹5.00 |
| Final dividend |
₹19.25 |
| Total FY26 dividend |
₹24.25 |
The larger payout came alongside a significant recovery in HPCL’s profitability.
What drove HPCL’s FY26 performance?
HPCL’s refineries processed 26.04 million tonnes during FY26, while sales volumes reached 51.45 million tonnes.
The company’s combined gross refining margin increased to $8.79 per barrel, compared with $5.74 per barrel in FY25. Standalone profit after tax consequently rose to ₹17,175 crore, compared with ₹7,365 crore in the previous year.
| Financial indicator |
Reported performance |
| Refinery throughput |
26.04 million tonnes |
| Sales volume |
51.45 million tonnes |
| Combined gross refining margin |
$8.79 per barrel |
| FY25 gross refining margin |
$5.74 per barrel |
| FY26 standalone PAT |
₹17,175 crore |
| FY25 standalone PAT |
₹7,365 crore |
The stronger earnings gave HPCL greater capacity to return cash to shareholders.
What investors should track
- Crude-oil prices
- Gross refining margins
- Petrol and diesel marketing margins
- LPG under-recoveries
- Government compensation
- Inventory gains or losses
- Rupee-dollar movements
Investor takeaway: HPCL’s FY26 dividend was supported by a strong earnings recovery, but refining and fuel-marketing profitability can fluctuate substantially between years.
Power Finance Corporation, or PFC, distributed a total dividend of ₹18.55 per share for FY26.
The payout comprised four interim dividends and a final dividend.
| FY26 dividend |
Dividend per share |
| First interim dividend |
₹3.70 |
| Second interim dividend |
₹3.65 |
| Third interim dividend |
₹4.00 |
| Fourth interim dividend |
₹3.25 |
| Final dividend |
₹3.95 |
| Total FY26 dividend |
₹18.55 |
What supports PFC’s dividend?
PFC finances projects across India’s power and infrastructure ecosystem. Its earnings are driven mainly by loan-book growth, interest spreads, funding costs and credit quality rather than commodity prices.
Continued investment in power generation, renewable energy, transmission and distribution creates a sizeable financing opportunity for the company.
For a financial institution, however, reported profitability alone does not determine dividend capacity. PFC must retain sufficient capital to support future lending and absorb potential credit losses.
What investors should track
- Loan-book growth
- Net interest margin
- Interest spreads
- Cost of borrowing
- Gross non-performing assets
- Net non-performing assets
- Provision coverage
- Capital adequacy
- Exposure to state power utilities
Investor takeaway: PFC combines a sizeable dividend with exposure to India’s power-investment cycle, but asset quality and capital adequacy remain central to the sustainability of its payouts.
REC distributed a total FY26 dividend of ₹18.55 per share, its highest annual dividend.
The company’s board recommended a final dividend of ₹1.55 per share, taking the full-year distribution to ₹18.55 per share.
What supported REC’s dividend?
REC reported its highest-ever annual net profit of ₹16,282 crore in FY26.
Its earnings per share increased to ₹61.71, while the company reported an interest spread of 2.62% and a net interest margin of 3.43%.
| REC FY26 metric |
Reported value |
| Net profit |
₹16,282 crore |
| Earnings per share |
₹61.71 |
| Interest spread |
2.62% |
| Net interest margin |
3.43% |
| Total dividend per share |
₹18.55 |
These indicators matter because a lender’s capacity to distribute cash depends on the combination of profitability, asset quality and available capital.
REC has also expanded beyond conventional power financing into renewable energy and infrastructure.
What investors should track
- Loan-book growth
- Net interest margin
- Interest spreads
- Gross and net NPAs
- Provisioning
- Capital adequacy
- Renewable-energy financing
- Infrastructure exposure
Investor takeaway: REC’s record FY26 dividend was supported by record profitability, but credit quality must remain healthy as the company expands its lending portfolio.
Bharat Petroleum Corporation Limited, or BPCL, distributed a total dividend of ₹17.50 per share in FY26.
The payout was supported by stronger downstream profitability during the year.
What drives BPCL’s dividend capacity?
BPCL generates a large part of its cash flow through refining and fuel marketing.
When gross refining margins and retail fuel margins are healthy, the company can generate substantial profits and operating cash flows. However, earnings can change significantly when crude-oil prices, refining conditions or domestic fuel-pricing economics become unfavourable.
Investors should therefore avoid assuming that a strong dividend in one year will automatically be repeated in the next.
What investors should track
- Gross refining margins
- Petrol and diesel marketing margins
- Crude-oil prices
- LPG profitability and compensation
- Refinery utilisation
- Capital expenditure
- Expansion projects
Investor takeaway: BPCL’s FY26 dividend benefited from favourable downstream economics, but future payouts remain sensitive to the oil, refining and fuel-marketing cycle.
ITC paid a total FY26 dividend of ₹14.50 per share.
The payout comprised an interim dividend of ₹6.50 per share and a final dividend of ₹8 per share. ITC shareholders approved the final dividend at the company’s July 2026 annual general meeting.
| FY26 dividend |
Dividend per share |
| Interim dividend |
₹6.50 |
| Final dividend |
₹8.00 |
| Total FY26 dividend |
₹14.50 |
ITC’s FY26 gross revenue increased 10.1% year-on-year to ₹80,867.49 crore, while EBITDA grew 4.9% to ₹25,208.22 crore.
| ITC FY26 metric |
Reported performance |
| Gross revenue |
₹80,867.49 crore |
| Gross revenue growth |
10.1% YoY |
| EBITDA |
₹25,208.22 crore |
| EBITDA growth |
4.9% YoY |
Why is ITC’s dividend profile different?
ITC differs from most metals, mining and oil companies in this list because its core cash generation is comparatively less exposed to commodity cycles.
The cigarette business remains an important source of profit and cash flow, while the company continues investing in its FMCG and other businesses.
This can provide greater visibility to shareholder distributions than businesses whose earnings depend heavily on metal, crude-oil or refining cycles.
What investors should track
- Cigarette volumes
- Tobacco taxation
- FMCG revenue growth
- FMCG margins
- Input costs
- Capital allocation
- Regulatory developments
Investor takeaway: ITC did not offer the highest absolute dividend in the list, but its underlying cash-generation profile is relatively less dependent on commodity and refining cycles.
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Want to assess ITC’s stock performance alongside its strong cash generation and dividend history? Check the ITC share price and relevant valuation metrics.
Oil and Natural Gas Corporation, or ONGC, paid a total FY26 dividend of ₹13.25 per share.
This comprised ₹12.25 per share in interim dividends and a final dividend of ₹1 per share.
| FY26 dividend |
Dividend per share |
| Total interim dividends |
₹12.25 |
| Final dividend |
₹1.00 |
| Total FY26 dividend |
₹13.25 |
What supports ONGC’s dividend?
ONGC’s upstream oil and gas operations generate substantial cash flows. Its consolidated business also benefits from downstream activities conducted through subsidiaries.
The company’s profitability, however, remains closely linked to crude-oil and natural-gas realisations. Production performance is equally important because stronger energy prices may not fully support earnings if oil and gas output weakens.
What investors should track
- Brent crude-oil prices
- Domestic gas prices
- Crude-oil production
- Natural-gas production
- New-field development
- Exploration success
- Capital expenditure
- Government taxation and energy policy
Investor takeaway: ONGC combines operating scale with meaningful shareholder distributions, but its future earnings and dividends remain sensitive to energy prices and production levels.
Power Grid Corporation of India, or POWERGRID, paid a total FY26 dividend of ₹9 per share.
Its dividend profile is different from that of oil, metals and mining companies because POWERGRID primarily operates regulated electricity-transmission infrastructure.
What supports POWERGRID’s dividend?
Operational transmission assets generate relatively visible revenue streams under the company’s regulated business model.
India’s expansion of renewable-power capacity also requires investment in transmission infrastructure. Large solar and wind projects are often located far from major electricity-consuming centres, creating the need for new transmission networks.
This provides POWERGRID with a long-term project and investment pipeline, although the company must continue funding substantial capital expenditure.
What investors should track
- New transmission project wins
- Capital expenditure
- Project commissioning
- Asset capitalisation
- Regulated returns
- Debt levels
- Competition under tariff-based competitive bidding
Investor takeaway: POWERGRID’s regulated business model provides relatively greater earnings visibility than cyclical commodity businesses, although capital expenditure, debt and allowed regulatory returns remain important.
Indian Oil Corporation, or IOC, paid a total FY26 dividend of ₹8.25 per share as its downstream earnings recovered substantially.
The improvement in profitability was supported by better refining and fuel-marketing economics during the year.
What drives Indian Oil’s dividend capacity?
IOC is India’s largest downstream oil company by scale, with operations spanning refining, fuel marketing, petrochemicals and other energy activities.
Its earnings can increase sharply when refining and marketing margins improve. The reverse is also true when margins weaken or government pricing conditions become unfavourable.
IOC is also undertaking substantial capital expenditure. Investors therefore need to assess dividends alongside future investment requirements and changes in net debt.
What investors should track
- Gross refining margins
- Fuel-marketing margins
- Crude-oil prices
- LPG profitability
- Petrochemical margins
- Refinery utilisation
- Capital expenditure
- Net debt
Investor takeaway: IOC’s FY26 earnings recovery supported its dividend, but refining and marketing profitability remains cyclical and the company’s capital requirements remain substantial.
The top dividend stocks in FY26 did not offer the same type of income profile. Their payouts were supported by different business models and therefore carried different risks.
Main Dividend Support
| Stock |
Main dividend support |
| Vedanta |
Commodity cash flows |
| Coal India |
Large operating cash generation |
| HPCL |
Refining and marketing earnings |
| PFC |
Lending profitability |
| REC |
Lending growth and profitability |
| BPCL |
Downstream cash generation |
| ITC |
Strong operating cash flows |
| ONGC |
Oil and gas cash generation |
| POWERGRID |
Regulated transmission earnings |
| IOC |
Refining and marketing earnings |
Principal Risk
| Stock |
Principal risk |
| Vedanta |
Commodity cycle and leverage |
| Coal India |
Long-term coal transition |
| HPCL |
Margin volatility |
| PFC |
Credit quality |
| REC |
Credit concentration |
| BPCL |
Oil and refining cycle |
| ITC |
Tobacco regulation |
| ONGC |
Energy prices and production |
| POWERGRID |
Capex and regulatory returns |
| IOC |
Margin volatility and capex |
Vedanta, Coal India and ONGC have significant exposure to commodity or energy-price cycles. HPCL, BPCL and IOC depend heavily on refining and marketing economics. PFC and REC are influenced by loan growth, interest margins, credit quality and capital adequacy.
ITC’s consumer-led cash generation is comparatively less cyclical, while POWERGRID’s regulated transmission assets offer relatively greater revenue visibility. Neither profile, however, removes business, regulatory or capital-allocation risk.
For investors comparing top dividend stocks in FY26, the amount distributed in the previous year should be treated as historical evidence rather than a guarantee of future income.
High-dividend stocks may be relevant for investors seeking a combination of periodic cash income and equity ownership. They are not automatically suitable for every portfolio or financial objective.
They may be considered by:
- Income-focused investors: Investors seeking periodic cash distributions may evaluate companies with consistent payouts, healthy cash flows and manageable debt.
- Long-term investors: Reinvested dividends can contribute to long-term compounding when the underlying business continues growing earnings and cash flows.
- Investors seeking established businesses: Many dividend-paying companies operate mature businesses that generate more cash than they require for immediate expansion.
- Investors seeking diversification: Dividend-paying companies across energy, utilities, financial services and consumer businesses can complement growth-oriented holdings.
A high dividend yield should not be considered attractive in isolation. Yield can rise because a company has increased its dividend, but it can also rise because its share price has fallen in response to weak earnings, excessive debt or worsening business conditions.
The better approach is to assess dividend consistency, payout ratio, earnings quality, free cash flow, debt and future capital requirements together.
A company’s previous dividend shows how much cash it distributed. It does not establish how much the company will be able to distribute in future years.
Four financial factors are particularly important.
1. Earnings
Dividends need to be supported by profits over the long term.
A large payout made during an unusually strong commodity, crude-oil or refining cycle may not be repeatable when industry conditions normalise. Investors should compare dividends with recurring earnings rather than relying on a single strong year.
2. Free Cash Flow
Accounting profit does not always translate into cash available for shareholders.
Investors should examine how much cash remains after working-capital requirements, operating expenses and capital expenditure. A company can report strong profit but still generate weak free cash flow if it needs substantial investment to maintain or expand its operations.
3. Balance Sheet
The company’s debt position matters because dividends compete with interest payments, debt repayment and business investment for available cash.
A company that continues paying large dividends while leverage rises may eventually need to reduce distributions and prioritise balance-sheet repair.
4. Capital Requirements
Several companies in this list operate capital-intensive businesses.
Oil refining, metals, mining, power transmission and infrastructure lending require substantial funding. Dividend distributions need to be balanced against refinery expansion, mine development, transmission projects, loan-book growth and other long-term investment requirements.
The main risks vary by company, but several factors can affect dividend sustainability across the list.
| Risk |
Why it matters |
| Dividend cuts |
Earnings weakness or higher cash needs can reduce payouts |
| Commodity cycles |
Changes in metal, coal, oil and gas prices can affect cash flows |
| Refining margins |
Margin changes can materially affect HPCL, BPCL and IOC earnings |
| Government policy |
Policy changes can affect pricing, regulation and PSU distributions |
| Credit quality |
Higher provisions or losses can reduce PFC and REC earnings |
| Capital expenditure |
Large investments can reduce cash available for dividends |
| Dividend taxation |
Tax reduces the shareholder’s effective dividend return |
Dividend Cuts
Dividends are not guaranteed. A company’s board can reduce or skip a payout when business conditions weaken, debt increases or more cash is required for investment.
Commodity and Energy-Price Cycles
Vedanta, Coal India and ONGC have meaningful exposure to commodity and energy prices. Changes in realisations can affect earnings, cash flows and future distributions.
Refining and Fuel-Marketing Margins
HPCL, BPCL and IOC can experience substantial movements in profitability depending on gross refining margins, crude-oil prices and domestic fuel-marketing economics.
Government Policy
Several companies in this list are PSUs or operate in regulated sectors. Government policy can influence fuel pricing, taxation, regulation, capital allocation and shareholder distributions.
Credit Quality
For PFC and REC, dividend sustainability depends partly on maintaining asset quality while expanding their loan books. Higher provisions or credit losses can reduce distributable earnings.
Capital Expenditure
A large dividend must be assessed alongside the company’s investment plans. A business that distributes cash while funding expansion through excessive borrowing may not have a sustainable payout model.
Tax on Dividend Income
Dividend income is taxable in the hands of shareholders. An investor’s post-tax return can therefore be lower than the headline dividend yield.
FY26 dividends provide useful historical information, but investors should not assume that the same payouts will continue automatically in FY27.
The most important indicators to monitor are:
- FY27 revenue and profit growth
- Operating cash flow
- Free cash flow
- Capital expenditure
- Net debt and leverage
- Dividend payout ratio
- Interim dividend announcements
- Commodity and energy prices
- Refining and fuel-marketing margins
- Asset quality at PFC and REC
- Capital adequacy at financial companies
- Government policy affecting PSUs
- Capital-allocation decisions
Company-specific indicators also remain important. Vedanta investors need to track metal prices, production and leverage. Oil-company investors need to monitor refining and marketing margins. PFC and REC investors should watch NPAs, provisions and lending growth, while ITC investors need to assess tobacco regulation, cigarette volumes and FMCG profitability.
The central question is whether each business can generate enough cash to fund both shareholder distributions and future growth without placing excessive pressure on its balance sheet.
The top 10 high dividend stocks in India for FY26 demonstrate that large payouts can come from very different business models.
Vedanta paid the highest dividend among the companies covered, distributing ₹34 per share. Coal India followed with ₹26.50 per share, while HPCL paid ₹24.25 per share. PFC and REC each distributed ₹18.55 per share, followed by BPCL at ₹17.50, ITC at ₹14.50, ONGC at ₹13.25, POWERGRID at ₹9 and IOC at ₹8.25 per share.
The dividend amount should not be assessed in isolation. Commodity companies carry earnings-cycle risk, downstream oil companies depend on refining and marketing margins, lenders require healthy asset quality and capital adequacy, and regulated or consumer businesses face their own capital-allocation and policy risks.
Investors evaluating high dividend-paying stocks should therefore look beyond the previous year’s distribution. The more important test is whether recurring earnings, free cash flow, debt levels and future capital requirements can support dividends over the long term.
To conduct your own analysis and track dividend announcements, you can use platforms like Finology Ticker. It offers free, in-depth data on dividend history, yield trends, payout ratios, and company financials, helping you make informed investment decisions.
Frequently Asked Questions
1. Which company paid the highest dividend per share in FY26?
Vedanta paid the highest dividend among the 10 companies covered in this analysis. It distributed ₹34 per share in FY26 through three interim dividends of ₹7, ₹16 and ₹11 per share.
2. What were the top 10 high dividend stocks in India in FY26?
Based on the dividend-per-share data covered in this article, the list comprises Vedanta, Coal India, HPCL, Power Finance Corporation, REC, Bharat Petroleum Corporation, ITC, ONGC, Power Grid Corporation of India and Indian Oil Corporation.
The payouts ranged from ₹34 per share for Vedanta to ₹8.25 per share for Indian Oil Corporation.
3. Which are the best dividend stocks in India for 2026?
There is no single best dividend stock for every investor. Vedanta offered the highest FY26 dividend per share in this list, but its payout is more exposed to commodity prices, leverage and capital expenditure.
ITC has a comparatively less cyclical cash-generation profile, POWERGRID benefits from regulated transmission earnings, while PFC and REC depend on lending profitability and credit quality. Investors should compare dividend sustainability, valuation, debt, cash flow and business risk instead of selecting a stock only because it paid the highest dividend.
4. Does a higher dividend per share always mean a higher dividend yield?
No. Dividend per share and dividend yield are different measures. Dividend yield changes with the market price of the stock. A company with a lower dividend per share can offer a higher yield if its share price is proportionately lower.
Investors should use the prevailing share price while comparing dividend yields.
5. What should investors check before investing in high-dividend stocks?
Investors should examine recurring earnings, operating cash flow, free cash flow, dividend payout ratio, debt, capital expenditure and future growth requirements.
They should also assess sector-specific risks such as commodity prices for Vedanta and ONGC, refining margins for HPCL, BPCL and IOC, credit quality for PFC and REC, tobacco regulation for ITC and regulated returns for POWERGRID.