Tata is most valuable brand despite 11% decline in value

Long-term profitability of U.K. steel business doubtful

Tata remained India’s most valuable brand in 2015-16 with a brand valuation of $13.7 billion despite 11 per cent value erosion during the year due to troubles concerning its steel business in the U.K, according to Brand Finance India.

“There has been a sharp decline in value this year. The current state of vulnerability the steel industry faces has created instability and Tatas were prey to the volatility,” said Ajimon Francis, Country Head, Brand Finance India that has come out with the rankings of top 100 most valued Indian brands.

Doubtful profitability

“The U.K. market has been particularly badly affected and the decision of the conglomerate to sell its U.K. steel operations in March caused considerable panic. Now, despite the partial recovery of steel prices and the packages announced by the U.K. Government post Brexit, the long-term profitability of the U.K. plants remains doubtful,” he said elaborating on the reasons behind the decline in Tata’s brand value.

The top 10 brands of 2015-16 include Tata, LIC ($6.6 billion), Airtel ($5.7 billion), SBI ($5.7 billion), Infosys ($4.7 billion), Reliance ($3.5 billion), ONGC ($3.4 billion), L&T ($3.3 billion), Indian Oil ($3.2 billion) and HCL ($3.2 billion).

Infosys brand value grew 110 per cent in two years due to leadership change.

Brand Finance values the brands on basis of several factors.

These include the company’s revenue, profit and future prospects. All of these are evaluated in a competitive context and each brand is assigned a brand strength index. Of the top 25 ranked brands, Airtel’s brand value has risen 28 per cent while Mahindra Group saw its brand value rise by 37 per cent to $2.95 billion.

While HDFC Bank, Idea Cellular and Amul moved up in the ranking, Adani Enterprises plunged to 60th rank from 26th last year. Suzlon, Indian Overseas Bank and Voltas saw their rankings going down.

Royal Enfield

Among the brands that had seen a remarkable rise in their brand value is Royal Enfield. Its brand value has gone up by 91 per cent to $519 million and is ranked 49, up from last year’s 84.

Commenting on the overall valuation of Indian brands Mr Francis said, “Brand India’s story is strengthening. There is an emergence of new age brands from e-commerce, IT services and banks. These new players emphasise India’s continued growth.”

Some of the new entrants into the list include Emami, IndiGo and Havells.