Dividend payout ratio

Dividends divided by earnings. What share of profit is handed back rather than retained.

A company earning ₹12.30 a share and paying ₹9.00 pays out 73.2%.

The right level depends entirely on what the company can earn on retained money. A business reinvesting at 25% should retain almost everything; one reinvesting at 8% against a 12% cost of capital should pay out almost everything, and the fact that it usually does not is the central problem of corporate capital allocation.

A payout ratio above 100% is being funded from the balance sheet.

Read it against incremental return on capital.

Keep it only if you can earn on it.