Having seen its brand value
dip in 2017 to its lowest point in five years, the Tata
group has bounced back with a nine per cent rise to touch Brand Value
(BV) of $14.2 billion in 2018, according to Brand Finance's annual study of the country's top 100 companies.
With this the Tata
group has broken away from the below 5 per cent growth in brand valuation that it was hovering at, pre-2016, and notched up a formidable lead with respect to the rest on the list. Second-ranked Airtel
is way behind at $6.6 billion and has seen its brand value
fall by 14 per cent, according to findings shared exclusively by the UK-based valuation firm with Business Standard
David Haigh, CEO of Brand Finance, sees the improved performance to be a direct result of the “pragmatic leadership of Chairman N Chandrasekaran”. “The Tata
Group is pursuing a consolidated long-term strategy as it ushers in a new era,” Haigh said. In 2017, the group’s drop in valuation was seen by many to be a result of its high-decibel boardroom battles. But Haigh had disagreed and said, "There has been intense speculation as to whether brand value
has fallen due to Tata’s boardroom drama. In our view this is emphatically not the case.”
Among the top 100 brands for 2018 that have seen the sharpest rise in brand valuations over 2017 is Kotak Mahindra Bank (74 per cent rise) followed by Piramal Enterprises
(38 per cent) and public sector unit
(PSU), Oil India (36 per cent). According to the report, Kotak Mahindra Bank “has not only expanded its countrywide presence but also shown discipline in shaping its governance and customer experience.”
HDFC Bank that debuts at Rank 8 in the top 10 this year has seen brand valuation rise by 19 per cent over 2017 to $4.07 billion. Haigh said, “Over the past year, HDFC Bank has grown steadily, making small and sensible acquisitions whilst maintaining its focus on digital banking. The bank has cleverly attracted young customers who want to buy, pay and invest at the click of a button.” Failing to find a place in the top 10 this year is L&T. Its brand value
fell by 16 per cent over 2017 to $3.9 billion and it slipped one spot to Rank 11.
Among the other brands in the top 10 list for 2018 are, Infosys at third position (brand value: $6.03 billion), LIC at fourth position ($5.96 billion), HCL at fifth position ($4.6 billion), SBI at sixth position ($4.4 billion), Indian Oil at seventh ($4.2 billion), HDFC Bank at eighth ($4.07 billion), Reliance at ninth ($4.03 billion) and ITC at tenth position ($4 billion).
What impacts brand value
the most? Financial performance said Savio D’Souza, Director, Brand Finance. “Long term investment in a brand’s equity among various stakeholders will help drive future revenue growth in the form of repeat and additional sales,” he said.
Most of the top 100 PSU banks have seen a decline in brand value
growth with SBI down 19 per cent, IDBI Bank down 30 per cent, Punjab National Bank by 16 per cent, Syndicate Bank
by 9 per cent, Central Bank of India by 21 per cent, and Bank of Baroda by 14 per cent. “There is a wide split between public sector bank brand values which have gone backwards while private sector bank brand vales are growing consistently,” said D’Souza. Also globally banking brands have grown 11.6 per cent whilst Indian banking brands grew marginally slower at 8.2 per cent in an earlier Brand Finance Banking 500 2018 study. But D’Souza is quick to add that this is no mean feat given that Chinese banking brands are the main driver of growth in the sector.
A similar decline in brand values is evident in telecom with “Jio triggering a drop in brand value
(down 14 per cent), Idea Cellular (down 15 per cent) and BSNL (down 23 per cent),” the report said.
Among the big gainers are auto major Maruti Suzuki and motorcycle manufacturing brand Royal Enfield. Royal Enfield registered a 25 per cent brand value
growth this year to touch $0.6 billion and has moved up from rank 59 in 2017 to 43 this year. Maruti Suzuki (26 per cent rise in brand value
growth to touch $3.2 billion) jumped from Rank 17 in 2017 to 13 in 2018. D’Souza points out that in each segment, strong brands are getting stronger when the overall economy is seeing modest growth.
Among the big losers this year are the Jaypee group, Coal India and Mother Dairy. Like the previous year, this year too Indian conglomerates account for the lion’s share of total brand value
with $31 billion (22.6 per cent share) followed by banking ($19.8 billion, 14.4 per cent) and oil and gas ($16.4 billion, 12 per cent) companies.