The value of the Infosys'' brand is pegged at Rs 7,488 crore
By Our Convergence Bureau | 21 May 2003
Bangalore: The Infosys brand has been valued at Rs 7,488 crore, as at the end of fiscal 2003. The value of the Infosys brand was 27.89 per cent of its market cap during fiscal 2003.
The Infosys brand value stood at Rs 7,257 crore during fiscal 2002 as against Rs 5,376 crore in fiscal 2001. Its market capitalisation as on 31 March 2002 was Rs 24,654 crore as compared to Rs 26,926 crore as on 31 March 2001.
Infosys had adopted the generic brand earnings (the multiple model to value its corporate brand), the company said in its annual report filed with the Securities and Exchange Commission. The concept finds mention in Valuation of Trademarks and Brand Names by Michael Birkin in Brand Valuation, edited by John Murphy.
Using the brand earnings-multiple model, Infosys based its valuation on the following assumptions, among others, the total revenues excluding other income after adjusting the cost of earnings, the annual inflation at 6 per cent, 5 per cent of the average capital employed and a tax rate of 36.75 per cent.
Infosys' annual report said the company had used various models for evaluating assets off 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."
