A Long-Term Goals Are Easier Said Than Achieved from a Titan’s Perspective

Long-term investing is seen as both an art and a science, and it is far from a straightforward “buy and hold” strategy. In this narrative, we will dive into the rollercoaster journey of Titan Company’s stock since 2006, spreading light on the vital lessons it offers to investors about the ups and downs of the market.

Titan’s Phenomenal Growth

Since 2006, Titan has delivered staggering returns, with the stock price surged more than 80 times. The stock has yielded a return of over 8000% during this period, demonstrating not only significant price appreciation but also remarkable growth in its bottom line. The chart above vividly illustrates this remarkable trajectory, with a compounded annual growth rate (CAGR) of approximately 29%.

The company’s bottom-line performance is equally impressive, showing a compounded annual growth rate of 23.28%. In 2006, Titan’s profits stood at a Rs. 77 crores, a figure that has since soared to a staggering Rs. 3333 crores. This represents a remarkable 43-fold increase in profits over the past 18 years, painting a compelling picture of Titan’s financial success.

Furthermore, Titan’s market capitalization at the beginning of 2006 was a modest Rs. 2,500 crores, but it has since ballooned to an impressive Rs. 2,95,000 crores. This remarkable growth highlights the attractiveness of equity investing and its potential for creating wealth over the long term. However, as with any investment story, there are twists and turns to consider.

The Long Period of Underperformance

For all its long-term success, Titan’s journey was gone through a surprising and lengthy period of underperformance. The stock, which had been on a stellar rise, touched a new high of Rs. 311 on November 30, 2012. Following this peak, Titan’s share price entered a prolonged consolidation phase. In a surprising turn of events, on November 25, 2016, the stock was valued at precisely Rs. 311, marking a disheartening 0% gain for investors over this four-year period. This dramatic underperformance served as a harsh reality check for even the most optimistic of Titan’s investors.

Over this period, Titan’s stock experienced numerous corrections, highlighting the considerable volatility it endured. The stock saw a decline of over 50% once, endured drops of more than 40% on four separate occasions, dipped more than 30% three times, and slid more than 20% on four occasions. Such prolonged underperformance weighed heavily on the stock’s price, challenging investors’ patience and convictions.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.