Tata Group dominates
Tata Group (brand value up 37% to US$19.6 billion) is once again India’s most valuable brand, according to the latest report by Brand Finance, the world’s leading independent brand valuation consultancy.
Mumbai-headquartered Tata Group is one of India’s largest conglomerates, operating in over 100 countries, across 5 continents. The Group’s dominance is clear with its brand value totalling more than second-placed LIC’s (up 23% to US$7.3 billion) and third-placed Infosys’ (up 8% to US$6.5 billion) brand values combined.
David Haigh, CEO of Brand Finance, commented:
“Tata Group is to be commended for its ability to scale new heights, as it is not only India’s most valuable brand, but has also recorded faster growth than any other top 25 brand, with an impressive 37% increase. The Group’s brand presence across autos, IT services, steel and chemicals continues to go from strength to strength and remains a pioneering force to be reckoned with”.
Banks register solid growth
Fourteen banking brands feature in this year’s Brand Finance India 100 report, with India’s three largest banks all registering solid growth: State Bank of India (up 34% to US$6.0 billion), HDFC Bank (up 19% to US$4.9 billion) and ICICI Bank (up 41% to US$3.9 billion).
The banking sector is currently undertaking a major shift as a result of an increase in spending on infrastructure, technology and innovative customer experience tools, all of which have the potential to contribute to heightened brand values across the board for banks. Advancements in technology have brought mobile and internet banking platforms to the top of their game, keeping them well placed to serve their varied customer base against the backdrop of a well-regulated robust environment.
Mahindra & Mahindra jump into top 5
From farm tractors to financial services to cutting-edge IT services, Mahindra Group is going from strength to strength, its brand value growing 35% to US$5241 million and thus sealing its position in the top 5 for the first time. Mahindra group has been making strong inroads into US markets and is setting some strong global ambitions.
ADAG suffers steep drop
Anil Dhirubhai Ambani Group (ADAG) has witnessed the steepest drop in brand value, falling 65% to US$559 million and dropping 28 positions in the ranking. The brand has witnessed continuous erosion in its value creation due to increased pressure from various group businesses and is currently facing some stiff questions from its stakeholders.
Jio is India’s strongest
In addition to measuring overall brand value, Brand Finance also evaluates the relative strength of brands, based on factors such as marketing investment, familiarity, loyalty, staff satisfaction, and corporate reputation. Alongside revenue forecasts, brand strength is a crucial driver of brand value. According to these criteria, telecommunications brand Jio (brand value US$3.6 billion) is India’s strongest brand with a Brand Strength Index (BSI) score of 87.01 out of 100 and a corresponding AAA brand strength rating.
Reliance Jio is making headway towards becoming India’s number 1 telecommunications provider. It seems likely that the brand will retain its low-price strategy as it continues to grow, gain and retain a solid reputation across its Indian customer base. Impressively, challenger brand Jio, is the highest new entrant in this year’s Brand Finance India 100 2019 in 14th position.
Aside from Jio, 6 further brands have made their debut into the ranking, across a variety of sectors.
Growing off the back of a huge organized retail opportunity in India, hypermarket chain DMart (US$937 million) has entered the ranking in 33rd position. India’s homegrown FMCG brand Patanjali (US$614 million) continues to make waves and steal market share from its multinational competitors and has entered the ranking in 51st position. Further down the table, new entrants Chennai Petroleum (US$258 million), Indian Overseas Bank (US$248 million) and Max Life Insurance (US$240 million) are all ones to watch for the year to come.
Note to Editors
Every year, Brand Finance values 5,000 of the world’s biggest brands. The 100 most valuable Indian brands are included in the Brand Finance India 100 2019 ranking.
Brand value is understood as the net economic benefit that a brand owner would achieve by licensing the brand in the open market. Brand strength is the efficacy of a brand’s performance on intangible measures relative to its competitors.
Additional insights, charts, and more information about the methodology, as well as definitions of key terms are available in the Brand Finance India 100 2019 report.
Data compiled for the Brand Finance rankings and reports are provided for the benefit of the media and are not to be used for any commercial or technical purpose without written permission from Brand Finance.
Communications Director, Brand Finance
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About Brand Finance
Brand Finance is the world’s leading independent brand valuation consultancy, with offices in over 20 countries. Brand Finance bridges the gap between marketing and finance by quantifying the financial value of brands.
Brand Finance helped craft the internationally recognised standard on Brand Valuation – ISO 10668, and the recently approved standard on Brand Evaluation – ISO 20671.
Brand Finance is a chartered accountancy firm regulated by the Institute of Chartered Accountants in England and Wales (ICAEW), and also the first brand valuation consultancy to join the International Valuation Standards Council (IVSC).
Brand Finance’s brand value rankings have been certified by the Marketing Accountability Standards Board (MASB) through the Marketing Metric Audit Protocol (MMAP), the formal process for validating the relationship between marketing measurement and financial performance.
Definition of Brand
Brand Finance helped to craft the internationally recognised standard on Brand Valuation – ISO 10668. It defines a brand as a marketing-related intangible asset including, but not limited to, names, terms, signs, symbols, logos, and designs, intended to identify goods, services or entities, creating distinctive images and associations in the minds of stakeholders, thereby generating economic benefits.
Brand strength is the efficacy of a brand’s performance on intangible measures, relative to its competitors. In order to determine the strength of a brand, we look at Marketing Investment, Stakeholder Equity, and the impact of those on Business Performance.
Each brand is assigned a Brand Strength Index (BSI) score out of 100, which feeds into the brand value calculation. Based on the score, each brand is assigned a corresponding rating up to AAA+ in a format similar to a credit rating.
Brand Valuation Approach
Brand Finance calculates the values of the brands in its league tables using the Royalty Relief approach – a brand valuation method compliant with the industry standards set in ISO 10668. It involves estimating the likely future revenues that are attributable to a brand by calculating a royalty rate that would be charged for its use, to arrive at a ‘brand value’ understood as a net economic benefit that a brand owner would achieve by licensing the brand in the open market.
The steps in this process are as follows:
1 Calculate brand strength using a balanced scorecard of metrics assessing Marketing Investment, Stakeholder Equity and Business Performance. Brand strength is expressed as a Brand Strength Index (BSI) score on a scale of 0 to 100.
2 Determine royalty range for each industry, reflecting the importance of brand to purchasing decisions. In luxury, the maximum percentage is high, in extractive industry, where goods are often commoditised, it is lower. This is done by reviewing comparable licensing agreements sourced from Brand Finance’s extensive database.
3 Calculate royalty rate. The BSI score is applied to the royalty range to arrive at a royalty rate. For example, if the royalty range in a sector is 0-5% and a brand has a BSI score of 80 out of 100, then an appropriate royalty rate for the use of this brand in the given sector will be 4%.
4 Determine brand-specific revenues by estimating a proportion of parent company revenues attributable to a brand.
5 Determine forecast revenues using a function of historic revenues, equity analyst forecasts, and economic growth rates.
6 Apply the royalty rate to the forecast revenues to derive brand revenues.
7 Brand revenues are discounted post-tax to a net present value which equals the brand value.