Tata Group was founded in the year 1868 by Jamsetji Tata. One of India’s largest conglomerates, this company is owned by Tata Sons. The second biggest business house in India with the highest number of companies listed on the stock exchange.
The Compound Annual Growth Rate (CAGR) is a financial metric that measures the average annual growth rate of an investment over a specified period, assuming the compounding of profits. It is a valuable tool for investors to evaluate investment growth or decline over time.
Listed below is one such Tata Group stock that has delivered a 26 percent CAGR return in 10 years:
Titan Company Ltd
With a market capitalization of Rs. 3,02,948 crores, the shares of Titan Company started Friday’s trading session on a flatter note at Rs. 3452.10 compared to its previous close of Rs. 3,452.05. During the trading session, the shares hit a low of Rs. 3,404.20, losing around 2 percent and closed the day at Rs. 3,412 apiece.
Looking at the company’s financial statements, the revenue decreased by 20 percent from Rs. 13,963 crores during the December quarter to Rs. 11,229 crores in the March quarter. On the other hand, the net profits declined by 27 percent from Rs. 1,053 crores to Rs. 771 crores during the same timeframe.
Additionally, the company’s revenue and profits have been steadily increasing, achieving a Compound Annual Growth Rate (CAGR) of 17 percent over the past decade.
Over the past decade, Titan shares have provided shareholders with a Compound Annual Growth Rate (CAGR) of 26.31 percent. To illustrate, an initial investment of Rs. 1 lakh in Titan shares 10 years ago would now be valued at Rs. 10,43,320.
In contrast, a similar investment in a Fixed Deposit (FD) with an assumed annual return of 7 percent would have grown to only Rs. 2,00,160 over the same period. This comparison highlights the significant long-term growth potential of equity investments like Titan compared to traditional fixed-income instruments such as FDs.
Due to consistent operating revenue and profits on a YoY basis, the profitability metrics of the company improved with the return on equity (RoE) increasing from 27.42 percent during FY 22-23 to 37.21 percent in FY 23-24, and, the return on capital employed (RoCE) increased marginally from 34.49 percent to 34.89 percent during the same timeframe.
According to the latest shareholding pattern, the Promoters retain a majority stake of 52.90 percent in the company. Foreign Institutional Investors (FIIs) hold 19.01 percent of the shares, while Domestic Institutional Investors (DIIs) possess 10.29 percent. And 17.57 percent of shares are held by the Public.
Titan Company Ltd is among India’s most respected lifestyle companies. It has established leadership positions in the Watches, Jewellery and Eyewear categories led by its trusted brands and differentiated customer experience.
Written By Vaibhav Patil
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