Dividend yield

Dividend per share divided by share price. A ₹18 dividend on a ₹1,200 share yields 1.5%.

The Indian trap is that companies often declare dividends as a percentage of face value rather than of price. A 900% dividend on a ₹2 face value share is ₹18, and the yield is 1.5%, not 900%.

A high yield is ambiguous. It can mean a mature business returning cash, and it can mean a price that has fallen because the market expects the dividend to be cut. The payout ratio and the cash flow tell you which.

Convert to rupees per share first, always.

A percentage on face value is not a yield.

For an Indian investor the tax treatment changes what the yield is worth. Dividends are taxed in the recipient's hands at their slab rate, so a 3% gross yield is meaningfully less after tax for somebody in the highest bracket, and a buyback returning the same cash can be worth more depending on the rules in force.