New Delhi, June 19 -- Dividends are typically seen as a signal of financial strength. But this earnings season, several Indian companies are issuing payouts even as their standalone accounts show red ink - a curious contradiction that reflects shifting capital allocation strategies.

For some firms, the payouts signal confidence in consolidated profitability despite temporary headwinds. For others, they may serve to reassure investors during ongoing restructurings. Either way, the trend raises a key question: are these dividends a genuine vote of confidence, or a potential red flag that warrants closer scrutiny?

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Let's take a closer look at the balance she...