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What Brand Finance report says about India’s most valuable companies

by Shatakshi
Annual turnover of Reliance Industries

COVID-19 pandemic is wreaking havoc on the world and Indian economy as a result top 100 most valuable brands of India could lose up to 15 per cent of their brand value. A drop of nearly $25 billion compared to the original valuation date of 1 January 2020 is expected, as per the Brand Finance India 100 2020 report.

According to the report, the brand value is the net economic benefit of the brand which it earns by licensing the brand in the open market. Whereas the Brand strength can be understood as the efficacy of performance of a brand on intangible measures relative to its competitors.

In this report, Brand Finance has analysed the effect of Coronavirus pandemic on the company’s value, in comparison to its previous value on 1 January 2020. The report classified industries into three categories which are, limited impact, moderate impact (loss up to 10 per cent), and heavy impact (where loss is up to 20 per cent).

The report says that Tata Group is the most valuable brand of India crossing the 20 billion dollars brand value mark for the first time and reflecting a  growth of 2.3 per cent. It further stated that the Premium hotel chain group Taj was the country’s strongest brand. According to the report, Tata Group is the only Indian brand that featured in the top 100 of the Brand Finance Global 500 2020 ( assessment of the brand value  of the world’s 500 most valuable brands)

Savio D’Souza, Valuation Director, Brand Finance said “The variety of businesses and large size of the  Tata Group could mean that it emerges from the COVID-19 pandemic, relatively speaking, unscathed. Despite citing considerable difficulties in the current climate and warnings of a significant downturn in profits for some of its businesses – namely, Tata Steel and Tata Motors – the Group will hope that the stability and strength of the TCS and Tata Consumer Products Ltd brands will offset any damage to other arms of the Group.”

The second spot in the list was of The largest insurer of India, Life Insurance Corporation of India (LIC) which showed a growth of 10.7 per cent in brand value at 8.1 billion dollars. The third place in the list is of Reliance Industries which registered a growth of 25.2 per cent growth at 7.9 billion dollars. The decision that proved profitable for Reliance group was to shift its focus from the energy sector to the telecoms, retail and media and sectors. The reliance now claims a large share of 34 per cent in a market revenue of the Indian telecoms sector, the report said. However this does not mean that the group has ignored its core oil and gas business, the company is entering into solid strategic partnerships with BP plc in the UK and Saudi Aramco in the Middle East to support its ambitious growth plan.

Also Read: Ministry denies Flipkart’s proposal for investing in food retail business

Banks have gained record brand value

Report enlist 14 banking brands with their cumulative brand value of 24.9 billion dollars, registering a growth of 25 per cent in average brand value,  demonstrating the sector’s defiance against NBFC pressure and the RBI tightened monetary policy.

The SBI (growth up to 8 per cent to 6.4 billion dollars) and HDFC (grew 22 per cent to 5.9 billion dollars) have retained their positions in the top 10, with the latter climbing one spot to 6th position in the ranking following a healthy 24 per cent brand value growth over the previous year.

Indian banks, like many other banks across the world, have been suffering as a result of the fragile global economic and political landscape. With the banking sector in the heavily impacted bracket in the report’s COVID-19 analysis, equating to a potential 20 per cent brand value loss, the road ahead looks similarly rocky, it said.

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Mukund June 29, 2020 - 2:59 PM

perfect article

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