IMPACT OF FINANCIAL BRAND VALUES ON FIRM PROFITABILITY AND FIRM VALUE OF INDIAN FMCG COMPANIES

The research paper reviews literature on various brand valuation models and estimates FMCG companies' financial brand values using an appropriate financial brand valuation model in the Indian context. The study examines how contemporaneous and time-lagged financial brand value and brand value drivers affect firm profitability. Data regression analysis examines FMCG firms' brand value in real time. From 2009 to 2018, 26 BSE 500 FMCG companies were sampled. Analysis uses panel data regression. Financial brand value, prestige driver, loyalty driver, extension driver (ED), return on assets, return on equity, stock price, and Tobin's Q were the main variables in the models. Brand value increases profitability. Strong brand values boost FMCG profits. Prestige, loyalty, and ED did not affect profitability. Brand and firm values also correlated positively. FMCG stocks rise with brand value. Advertising spending increased firm value and profitability. Brand value had a positive one-year lagged and contemporaneous effect on firm profitability measures up to three years. Brand value increases the firm's return on assets (ROA) by 0.12 units in the current year. One-year lagged effect is 1.6. Two- and three-year lags had no significant effect. Brand value increases the firm's Tobin's Q by 0.08 units in the current year and 0.36 units one year later. Tobin's Q was unaffected by two- and three-year lags. Brand value had a contemporaneous effect on stock prices, but its three-year time-lagged effect was negative. Only 26 Indian capital market FMCG companies are studied. The literature review and hypotheses development mostly support the theoretical bases. The findings have important practical implications for FMCG firms, management departments, investors, investment analysts and managers, the government, and other policymakers.