News

Published: June 13, 2024
Updated: June 13, 2024

Oracle Financial Services Nears Record High Following Strong Parent Earnings

Surge Driven by Parent Company’s Performance:

Shares of Oracle Financial Services Ltd. surged by 6% to ₹8,935 on Wednesday after its parent company, Oracle Corp., reported robust earnings in the US. Oracle Corp.'s stock saw a significant gain of up to 9% in extended trading on Wall Street, driven by better-than-expected bookings and new partnership deals with other tech companies.

Record Dividend Announcement:

Following its March quarter results, Oracle Financial Services announced a dividend of ₹240 per share, marking the highest dividend since 2014, when it declared ₹485 per share. This substantial dividend reflects the company’s strong financial performance and commitment to returning value to its shareholders.

Historical Dividend Performance:

In recent years, Oracle Financial Services has consistently rewarded its shareholders with substantial dividends:

₹225 per share in 2023
₹190 per share in 2022
₹200 per share in 2021

Since 2014, the company has distributed dividends totaling ₹2,100 per share, showcasing its ongoing profitability and shareholder-friendly policies.

Impact of Parent Company’s Results:

Oracle Corp.'s impressive performance significantly boosted its subsidiary’s stock. Oracle's total remaining performance obligations, a key measure of future contracted sales, rose by 44% to $98 billion for the quarter ending May 31, far surpassing the average estimate of $73.9 billion. Revenue from Oracle’s cloud unit also saw a 42% year-over-year increase to $2 billion, contributing to a total revenue growth of 3.3% to $14.3 billion.

Strategic Shifts and Challenges:

Oracle Corp. has been focusing on transitioning its legacy software business to the cloud, a move that has faced some challenges, including customer departures and renegotiations of significant federal contracts. Nonetheless, its health unit, bolstered by the acquisition of Cerner for $28 billion in June 2022, continues to support its growth.

Current Stock Performance:

Oracle Financial Services' stock is now trading at ₹8,705, up by 3.2%, and is close to its all-time high of ₹9,023 reached on April 1 this year. The stock has doubled in value in 2024, reflecting investor confidence in the company’s strong financial outlook and strategic direction.

Oracle Financial Services Ltd. continues to demonstrate robust financial health, driven by the strong performance of its parent company and strategic initiatives. The recent dividend announcement and surge in stock price underscore the company’s ability to deliver consistent value to its shareholders, positioning it well for future growth.