NEW DELHI: India's trillion-dollar plus stock markets boast of 20
companies with a brand value of over $1 billion, up from 16 last
year.
There are now a dozen (BSE-listed) companies with a brand value over
$2 billion (vis-à-vis nine last year) and half-a-dozen with over $3
billion (up from four last year).
Raise the cut-off to $6 billion, and it's a club-of-one, India's
biggest private-sector company, Reliance Industries, with an end-2007
brand value of $6.81 billion (Rs 26,801 crore) vis-à-vis $5.8-billion
in end-2006.
Using the relief-from-royalty method of brand valuation, which assumes
that a company does not own its brand and needs to licence it from a
third party, a global leading brand valuation firm, London-
headquartered
Brand Finance India's Top 50 Most Valuable (Company) Brands, 2008,
presented exclusively by ET, studied only BSE-listed consumer-facing
corporate brands (and not holding companies, such as Hindustan
Unilever, which own a portfolio of branded businesses) to arrive at
the BF Top 50 list.
Prima facie, the BF Top 50 study doesn't show any dramatic shift in
last year's line-up. The top brands are evenly spread out across
sectors pretty much like last year, reiterating the fact that brands
can create significant value even outside the traditional consumer
goods sector.
As many as nine out of top 10 brands of last year have maintained
their place in the roster, albeit with a minor reshuffle in positions.
Hindustan Petroleum Corporation (HPCL) is the only one to have got
nudged out by a newcomer, Bharti Airtel, from the Top 10 list.
And even though the total brand value of Top 50 at $68.25 billion
looks impressive compared with last year's figure of $50.8 billion,
it's largely the effect of rupee appreciation (at an average exchange
rate of Rs 45.5 and Rs 39.3 to a dollar in calendar 2006 and 2007,
respectively, for the purpose of this study) that reflects an over 34%
jump in the dollar-denominated brand valuation. In rupee terms, the
Top 50's brand value has gone up by only 15%, Rs 2.67 lakh crore from
Rs 2.32 lakh crore.
However, a closer scrutiny of the Top 50 list highlights some twists
in the tale. For one, it marks the debut for 11 new brands on the Top
50 list, United Breweries, Tata Tea, Dabur, Idea, Tata Communications,
Pantaloon, DLF, Jaiprakash Associates, GMR, Reliance Infrastructure
and Gail.
Says Brand Finance India MD M Unni Krishnan: "These brands have
swiftly grown in size through a combination of organic and inorganic
growth and their ability to transform their business to offer a whole
range value proposition to customers. These brands have shown
leadership in shaping their industries ahead of time and consequently
strengthening their ability to retain and acquire new customers."
The cut-off for Top 50, which was a low Rs 172 crore (No. 50, Essar
Oil's brand value) last year, has moved up to Rs 645 crore this year
(Gail at No. 50 this year). Equally, as many as one in five brands on
the Top 50 list last year dropped out of the list this year, IDBI
Bank, Canara Bank, Essar Steel, Cipla, Nicholas Piramal, Reliance
Energy, Sun Pharmaceutical, Gujarat Ambuja, Reliance Capital, ACC and
LIC Housing. "Whilst the IDBI brand remains valuable, we have not been
able to complete the brand valuation analysis due to paucity of
marketing, customer and people data/information in the public space,"
explains Mr Krishnan.
Two, the emergence of infrastructure as a fresh force and the decline
of banking & finance and manufacturing in the brand war for supremacy
in valuation. Though RIL retains its top position this year too, the
petrochem-to-retail giant has seen its brand value (in rupee terms)
remain virtually static, it barely inched up 1.4% over the year.
Gainers in the top 10 include Bharti Airtel (brand value: Rs 9,798-
crore), which rose three rungs to settle at rank 8 and ICICI Bank (Rs
11,533-crore) that moved two slots up to reach the No. 7 spot. More
than scaling the chart, the two have seen a jaw-dropping change in
their values.
Bharti Airtel gained as high as 26% in (rupee) value while ICICI Bank
followed with a increase of 24% in brand value. Interestingly, it's
been a lacklustre year for the oil navratnas in the public sector.
They continue to be under pressure due to rising crude prices and
steep under-realisation due to government price controls.
All three oil PSUs, IOC, BPCL and HPCL, not just slipped down in the
chart, they saw a significant erosion in their brand value in 2007.
IOC slid to the third position (from No. 2 last year) with a brand
value of Rs 17,987 crore (a drop of 5.3%), BPCL dropped to No. 9 slot
from No. 7 last year and saw its brand value erode by a whopping 17%
and HPCL down by 15%. SBI at No. 4, is the only one amongst the PSUs
to hold its own while showing a remarkable rise, close to 16%, in its
brand value.
Sectoral analysis shows that banking & finance rule the list with nine
brands although their number has dwindled over the last year. Oil &
gas and IT have sent in six brands each, followed by automobile (four
brands) in the list. Amidst the construction boom and some big-ticket
IPOs in that space, infrastructure brands made a grand entry in the
study for the first time.
These include highly-visible brands of 2007, DLF, Jaiprakash
Associates, GMR and Reliance Infrastructure, at rank 43, 46, 48 and
49, respectively. The entries from a new sector had an obvious impact
on brand from other sectors. While FMCG and telecom added new brands
to the list of Top 50, banking & finance, manufacturing (steel,
cement, durables) and pharma saw brand representation from within the
sector go down.
Barring a handful of brands, there's been relatively minor shifts in
ranks. The steepest fall has come for the likes of Tata Power (No. 47
versus No. 38 last year), Bank of Baroda (No. 39 and No. 30) and
Videocon (No. 35 and No. 27). Others that moved down sharply in the
list include Taj (Indian Hotels) that fell from No. 26 to No. 33 and
JSW Steel dropped from No. 37 to No. 42.
The study in its second year still manages to say a lot about the
rapidly transforming business landscape in India. It's no longer about
consumer goods alone. The dominance of banking, IT, oil & gas, et al,
may pale as we go along and we could see a rise of brand from new
sectors that get a boost in the emerging new economic paradigm.
Source : Economic Times
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