Fundamental Glossary / Growth Metrics
5-Year CAGR
A compound annual growth rate measured over five years.
Formula
(Value now / value five years ago) ^ (1 / 5) - 1.
What it means
Five years usually covers a full planning cycle and at least one rough patch. It is a better test of a growth claim than a single year.
For Indian listed companies, five fiscal years of annual reports are normally available, so the inputs are reported rather than estimated.
How to read it
Use 5-year revenue CAGR and 5-year EPS CAGR together. If revenue compounded and EPS did not, dilution or margin gave the gain away.
What to watch
A change of control, a merger, or a demerger inside the five years means the start and end are different companies. The rate is then a history of the entity, not of one business model.
This note explains the term. It is not a research recommendation, a target price, or a comment on any security. Ratios and regulatory thresholds change; use the latest filing or circular for a live figure.