Infosys - Dividend Payout Ratio

I just started reading the Infosys balance sheet. In the letter to the shareholder the management has stated and I quote

“ We have decided to increase the dividend payout ratio upto 30% of net profits effective fiscal 2009. Our current financial policy is to pay dividend upto 20 % of net profits.”

Infosys this year is paying out Rs 33.25 per share as dividend ( special dividend of Rs 20) which on a consolidated EPS of Rs 81 is higher than the 30% defined for next year onwards signalling a higher dividend payout philosophy.

The higher dividend payout ratio is good from the shareholders perspective as Infosys is already sitting on about 8400 crores of cash and cash equivalents on it balance sheet which is earning far lower than the cost of capital.