Helping You Build Wealth With Honest Research
Since 1996. Try Now

MEMBER'S LOGIN

MEMBER'S LOGINX

     
Invalid Username / Password
   
     
   
     
 
Invalid Captcha
   
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  

Earning power of Indian vs. foreign brands
Wed, 22 Jun Pre-Open

Indian bellwethers like Infosys, Tata group and L&T recently made news topping global titans like Google and Apple in terms of brand strength in India. The fact that the former had an upper hand due to their local incorporation cannot be ignored. Also that in times of uncertainly companies that have a very long history of brand building win brownie points is well accepted. The likes of SBI and LIC that have also found a place in the list have decades of existence to piggy back on.

But does the earning power of these brands make them lucrative investment targets? The likes of Buffett are known to be followers and investors into brands that consumers are addicted to. Be it Coca Cola, American Express or Gillette. So much so that in most of these cases the brand value of the companies are as much as 20% of their market cap. With the exception of Munich Reinsurance, Sanofi Aventis, US Bancorp etc. most of Buffett's investments fall within the list of top 500 Global Brands. This even includes his investments in Chinese company BYD and South Korean Posco.

According to Brand Finance, the brand value of the Tata group has doubled in the past 3 years positioning it amongst the top 50 globally. In addition to better geographical presence and higher profitability, the fact that the earning power of Tata's brand has improved adds merit to its high brand value.

So, why are companies like Google and Apple that are growing at break neck speed less favoured? The only answer that we have is relative uncertainty about long term prospects. While the likes of Google and Apple currently have sufficient brand value to boast of, their ranking could be paling in India on two counts. The relative unfamiliarity amongst Indian masses and the fast changing nature of technology.

Thus investing in brands is certainly a good approach. However, it would be advisable to look at the long term sustainability of the brand value before arriving at an investment decision.

For information on how to pick stocks that have the potential to deliver big returns, download our special report now!

View all commentaries | Archives

Read the latest Market Commentary


Equitymaster requests your view! Post a comment on "Earning power of Indian vs. foreign brands". Click here!

  
ABOUT EQUITYMASTER

Since 1996, Equitymaster has been the source for honest and credible opinions on investing in India. With solid research and in-depth analysis Equitymaster is dedicated towards making its readers- smarter, more confident and richer every day. Here's why hundreds of thousands of readers spread across more than 70 countries Trust Equitymaster.

PREMIUM PRODUCTS
QUICK LINKS
POPULAR TOPICS
TRENDING TOPICS
FREE NEWSLETTERS
EQUITYMASTER SUPPORTS
  • HelpYourNGO
  • You Tube
  • Linkedin
  • Twitter
  • Telegram
  • Google Play

Copyright © Equitymaster Agora Research Private Limited.

Whitelist | Refer | Terms | Privacy | Contact | About | Sitemap

Phone +91-9136015013

Equitymaster Agora Research Private Limited (Research Analyst)
SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.

103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
Telephone: +91-22-61434055. Email: info@equitymaster.com. Website: www.equitymaster.com.
CIN:U74999MH2007PTC175407

Name of the Compliance & Grievance Officer: Ms Sonal Ramachandran
Telephone: +91-22-61434003 | Email: compliance@equitymaster.com

LEGAL DISCLAIMER:
Investment in securities market are subject to market risks. Read all the related documents carefully before investing.
Registration granted by SEBI and certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors.

All rights reserved. Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement.

Equitymaster Agora Research Private Limited (Research Analyst) bearing Registration No. INH000000537 (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA, Canada or the European Union countries, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.