Free cash flows: Case study of Titan

In our previous part of the story, we learnt the reasons which make most companies in Marcellus' Consistent Compounders portfolio similar to Type 3 companies defined in the first part of the story. Here is an example of a Consistent Compounder which has focused on free-cash-flows-oriented initiatives. Titan: A case study In India, all jewellers outsource manufacturing of gold jewellery to the karigar (goldsmith) community which is highly unorganised and marked with outdated practices/technologies of manufacturing, along with poor work conditions. The resulting challenge is inefficient supply chain in form of higher wastage, high manufacturing lead times, leading to high investment in RM/WIP (raw material/work-in-process) inventory of a high-value commodity like gold. Titan radically disrupted the status quo, starting with the basics by engaging with karigars to upgrade their working

This article was originally published on December 28, 2021.