This study makes an effort to give an understanding of the recent dividend policy. This research aims to examine the effect of efficiency on dividends and also examine the moderating effect of profitability on dividends. To determine corporate efficiency, Data Envelopment Analysis (DEA) is employed, and to investigate the data, regression is used. This study uses the panel data of 78 firms listed under the BSE S&P 100 (one of the prime indexes of the Bombay Stock Exchange) throughout 2016–2020 extracted from CMIE Prowess. In prior literature, various factors are studied, and their impact on dividend as well. This study finds that efficiency positively impacts the dividend payout of firms, but the moderator net profit margins do not affect the dividend payment of firms. The result shows that the change in efficiency impacts dividend policy. So, this study adds new knowledge to policymakers and investors to consider efficiency as one of the factors while selecting a company for investment.