The Hindu Business Line : Infosys brand valued at Rs 8,185 crore

THE "Infosys" brand appreciated 9.3 per cent to touch Rs 8,185 crore during fiscal 2004, when the company's revenues crossed the billion-dollar mark.The software giant's brand value was estimated at Rs 7,488 crore in 2003.Its market capitalisation as on March 31, 2004 stood at Rs 32,909 crore, an increase of 22.5 per cent over previous year's 26,847 crore.

Infosys adopted the generic brand earnings-multiple model to value its corporate brand, the company said in its latest annual report filed with the Securities and Exchange Commission (SEC). The concept finds mention in an article titled Valuation of Trademarks and Brand Names by Mr Michael Birkin in the book Brand Valuation, edited by Mr John Murphy.

Using the brand earnings-multiple model Infosys based its valuation on the following assumptions, the total revenues excluding other income after adjusting the cost of earnings, the annual inflation at five per cent, five per cent of the average capital employed and a tax rate of 35.87 per cent.

The report said, Infosys has used various models for evaluating assets of the balance sheet to bring certain advances in financial reporting. "Such an exercise also helps the Infosys management in understanding the components that make up goodwill. The aim is to lead a debate on the balance sheet of the new millennium," it added.

Quoting a study carried out by brand consultancy firm Interbrand, the report said that US brands claimed 62 places in the top 100 most valuable global brands including eight of the top 10 slots in 2003. Not surprisingly, the Interbrand study found that technology companies such as Microsoft, IBM, Intel and Nokia were part of the world's 10 most valuable brands in 2003.

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