Thanks @bheeshma for providing this good insights.It is very helpful.
When I was going through Gruh thread and saw @Rajesh1975’s post few months back . He also nicely explained by this thesis that How Gruh can control his growth and dividend payout in any adverse situation for the beneficial of shareholder . Its Business Model is super strong .
I was already searching to understand that how to calculate incremental ROE for dividend payout company and found this link . But the formula used in this links seems not correct.Might be I am wrong.
http://valueoperations.com/vo2014/incremental-return-on-equity/
Your calculation is more logical and correct to me as it is giving correct result for companies like HDFC AMC ,Hawkins ,Page etc.