Outperformance of Strong Established Brands in the Indian Stock market - Chart Of The Day 14 September 2018 - Equitymaster

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Outperformance of Strong Established Brands in the Indian Stock market
Sep 14, 2018

10 years back, one of the biggest stories unfolded in stock market history. Lehman Brothers filed for bankruptcy on 15th September 2008.

The Indian Stock Market wasn't immune to the global meltdown. In the next month, the BSE Sensex would fall a further 40% to close around 8,000 levels. This from the all-time high of 21,000 made in January the same year.

If ever there was a time of maximum pessimism that was it.

I mentioned above how branded businesses are the best option in times of maximum pessimism.

A look at the performance of the best brands post the Lehman crisis certainly strengthens my belief.

The top five established branded companies part of the BSE Sensex back then have comfortably out-performed the overall index.

Their stable business models and strong brand power have ensured the dual benefits of stock re-rating as well as improved earnings.

With the macro environment turning volatile, well established branded businesses might just be the right place to look.

Data Source: Ministry of Finance, Government of India

This Chart Of The Day was published in The 5 Minute WrapUp - In the Next Market Crisis, Buy 'Branded Stocks'

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