Software major Infosys Technologies Ltd has recorded a 3.18 per cent increase in its brand value at Rs 7,488 crore (Rs 74.88 billion) as of March 31, 2003 against Rs 7,257 crore (Rs 72.57 billion) in the previous year.

Market capitalisation of the stock was at Rs 26,847 crore (Rs 268.47 billion) as on March 2003 against Rs 24,654 crore (Rs 246.54 billion) in the previous fiscal.

Value of the Infosys brand as percentage of market capitalisation fell 2 per cent to 27 per cent, against 29 per cent in the previous year.

In 2001-02, the brand recorded 35 per cent growth against 2000-01, while its market capitalisation declined 8 per cent.

In 2000-01, it recorded Rs 130 crore (Rs 1.3 billion) increase in brand value to Rs 5,376 crore (Rs 53.76 billion). Its market capitalisation during the period declined 55 per cent to Rs 26,926 crore (Rs 269.26 billion).

Infosys has for the last three years been evaluating its brand value for it believes that intangible assets had a significant role in defining growth of hi-tech companies.

Search for added value invariably led it back to understanding, evaluating and enhancing the intangible assets of the business.

From time to time, Infosys has used various models for evaluating assets off the balance sheet to bring certain advances in financial reporting from the realm of research to the notice of the shareholders.

Such an exercise also helped the company understand the components that made up goodwill. The aim of such modeling was to lead the debate on the balance sheet of the next millennium.

The Infosys management cautioned investors that these models were still subject of debate among researchers and using such models and data in predicting the future of Infosys, or any other company, was however risky.

Infosys also believes that goodwill is a nebulous accounting concept that is defined as the premium paid to tangible assets of a company.

It is an umbrella concept that transcends components such as brand equity and human resources, and is the result of many corporate attributes including core competency, market leadership, copyrights, trademarks, brands, superior earning power, excellence in management, outstanding workforce, competition, longevity and so on.

The management has adapted the generic brand-earnings-multiple model (given in the article on Valuation of Trademarks and Brand Names by Michael Birkin in the book Brand Valuation, edited by John Murphy and published by Business Books Limited, London) to value its corporate brand.