DRIVIN G ROWTH - Dr. Reddy's

and valuation
THE DICTUM in any knowledge-driven
industry is certum ex Uncertis, that is
“Certainly out of Uncertainity”.
In the free market economy, we operate,
building tangible assets that will serve as
competitive advantages in the transient
period. The only durable competitive
advantage in this scenario would be to build
strong brand equity and add value and
strength to our delivery system.
Table 2
|
Value of Dr. Reddy’s Brand
RS. IN MILLION
For the sixth consecutive year, Dr.
Reddy’s has attempted to put a rupee figure
to its efforts to build a strong brand.
The Interbrands earnings Multiple
Approach has been used to evaluate the
“Dr. Reddy’s” brand.
An inflation factor of 6% has been
assumed.
The brand strength is a composite of
seven internal attributes.
2002 2001 2000
Profit Before Interest & Tax 4817 2158 1236
Non recurring & non brand income
Extraordinary items 1149
Non brand income -444 -108 -62
Adjusted profit 5521 2050 1174
Inflation compound factor 1 1.06 1.12
Present value of brand profits 5521 2173 1319
Weightage factor 3 2 1
Weighted profits 3705
Remuneration of capital @ WACC 1871
Brand related profits 1833
Tax @ 8.3 % * 152
Brand earnings 1681
Multiple applied 20
Dr. Reddy’s Brand Value 33626
* Excludes deferred tax Liability
DR. REDDY’S LABORATORIES LTD. | INTANGIBLES ACCOUNTING | ANNUAL REPORT 2001-2002
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