'Keiretsu' is a Japanese business structure that describes a network of companies that hold stakes in one another while maintaining close business ties.
Family-owned Indian conglomerates, such as the powerhouses Tata, Bajaj, Mahindra and the Murugappa Group, benefit from such a model: they operate across various sectors, cross-sell and share resources within their family companies. These interconnections have provided stability and supported long-term value creation over the past decades. Family businesses like these contribute to 79% of the country’s GDP, according to HSBC Global Private Banking report.
N Chandrasekaran, Chairman of Tata Sons, sums up this advantage, saying, “The most important thing is what I call ‘group leverage’—the ability of individual operating companies to leverage each other’s strengths and work together to create a force multiplier for the entire group.”
In this edition of Chart of the Week, we analyse family-owned stocks that have outperformed the index over the past year. Four family group companies appear frequently in this screener, including Murugappa, Mahindra, Tata and Bajaj.
Bajaj Group stocks outperform the index on strong AUM growth
The Bajaj Group has 12 listed companies with a total market value of Rs 8.6 lakh crore, spanning the two- and three-wheeler, finance, housing finance, holding companies, household appliance, and personal products segments.
Among these, Bajaj Finserv, Bajaj Finance, Bajaj Housing Finance and Maharashtra Scooters outperformed the Nifty 50 by 22.9 percentage points, 25.1 percentage points, 67.6 percentage points and 48.3 percentage points, respectively.
Bajaj Group’s financial stocks jumped the most over the past year. Bajaj Finserv, the flagship financial services holding company of the group, rose 27.8% in the same period.
Bajaj Finserv’s revenue grew 21.2% during FY25 on the back of improvements in annual premium equivalent (APE) and value of new business (VNB). The company’s health insurance business also improved, driven by higher premiums from the motor and retail health insurance segments.
Bajaj Finance, the lending arm of the Bajaj Group and a subsidiary of Bajaj Finserv, rose by 30% in the same period. Bajaj Finance’s subsidiary, Bajaj Housing Finance, was listed on the bourses in September 2024 and has jumped 72.5% in the past year.
Bajaj Finance’s FY25 revenue and net profit increased by 26.8% and 15.1%, respectively. An improvement in assets under management (AUM), net interest income (NII), customer acquisition, and the addition of new locations throughout the year led to a rise in revenue.
The company’s Vice Chairman, Rajeev Jain, said, “FY25 was a good year for the company in terms of volumes, AUM growth, customer acquisition, operating efficiency, and pre-provisioning profit. The company booked a record 18.8 million loans and expanded its customer franchise.”
Maharashtra Scooters (MSL) was the scooter segment of the Bajaj Group before transitioning into a core investment company (CIC) after Bajaj Auto took over scooter manufacturing operations. It has risen 53.2% over the last year. MSL operates as an unregistered CIC, meaning at least 90% of its assets are invested in Bajaj Group entities. As a CIC, the company’s value is directly linked to the performance and dividends of these investments.
Murugappa Group stocks gain from strong fertiliser demand
The Murugappa Group operates businesses in agriculture, engineering, and financial services industries, with nine listed companies. Some of its businesses hold stakes in other group companies, creating cross-holdings that influence profits and business growth.
Out of the nine listed stocks of the Murugappa Group, four have outperformed the benchmark index over the past year. Cholamandalam Financial Holdings (CFHL), EID Parry, Coromandel International, and Cholamandalam Investment and Finance Company (CIFCL) outperformed it by 37.2, 37.4, 33.7, and 1.3 percentage points, respectively.
Cholamandalam Financial Holdings (CFHL) is the core investment arm of the Murugappa Group. Over the past year, its shares have risen by 42.2%, supported by the strong performance of its key subsidiary, Cholamandalam Investment and Finance Company (CIFCL). CFHL holds a 44.3% stake in CIFCL, which allows it to earn regular dividends and benefit directly from CIFCL’s growth.
In FY25, CIFCL’s revenue grew 35% to Rs 25,845.9 crore, and its profit increased 24.6%, supported by higher vehicle finance disbursements and improved net interest income.
Ravindra Kundu, MD, said, “We expect disbursements in the vehicle financing segment to grow by 17% in FY26, helped by better performance and capacity utilisation in the small commercial vehicle and light commercial vehicle segments."
In agri-business, EID Parry owns a 56.1% stake in Coromandel International. This helps Coromandel save costs by using by-products from EID Parry’s sugar factories and lets EID Parry sell its products through Coromandel’s retail stores.
EID Parry’s shares surged 42.3% over the past year, supported by government policies on biofuels and diversification into consumer segments. Meanwhile, Coromandel International, which operates in the farm inputs sector, also outperformed, with shares rising 38.6% over the past year, helped by strong fertiliser demand and government subsidies.
Mahindra Group stocks rise on expansion plans
Mahindra Group has companies across industries, including cars & utility vehicles, IT consulting & software, auto parts & equipment, and financial services, among others.
Three stocks from the group outperformed the benchmark index, with Mahindra & Mahindra (M&M), Tech Mahindra, and Swaraj Engines outperforming the index by 4.7, 7, and 40.2 percentage points, respectively.
M&M is the flagship of the Mahindra group, manufacturing electric vehicles, sports utility vehicles, commercial vehicles, and farm equipment. The company is also a majority stakeholder (52% stake) in Swaraj Engines, which manufactures tractor engines for M&M’s Swaraj division (tractor segment).
Tech Mahindra is the IT consulting & software arm of the conglomerate and provides tech support and digital capabilities to Mahindra Group companies alongside a global client base.
M&M rose 9.6% over the past year, led by revenue and net profit growing 14.3% and 14.7%, respectively, in FY25. Improvements in sales of cars, tractors, electric three-wheelers, and commercial vehicles helped revenue growth.
Swaraj Engines is up 45.2% over the past year, after an 18.5% growth in revenue and a 20.4% increase in net profit in FY25. An increase in demand from the tractors division of M&M, which accounts for 90% of Swaraj Engines' total revenue, contributed to revenue growth.
Tech Mahindra’s stock price rose by 11.8% in the last year, supported by its net profit jumping by 80.3% during FY25. Lower employee benefits and sales expenses, along with higher margins due to Project Fortius (Tech Mahindra's three-year plan, launched in April 2024, aimed at achieving a 15% operating margin by FY27), contributed to improved profitability.
Tata Group stocks rise on business expansion and cross-company support
Tata Group’s 26 listed companies span across steel, automobiles, IT products, FMCG, and hospitality, with a combined market value of Rs 31.1 lakh crore. Each Tata group company collaborates with others in the group.
For instance, Tata Consultancy Services handles IT services for group companies, Indian Hotels purchases vehicles from Tata Motors, Tata Power supplies power to the group’s factories, and Tata Steel supplies steel to Tata Projects for construction activities.
Over the past year, only two of the 26 listed companies have outperformed the Nifty 50 index. Indian Hotels Company (IHCL) and Titan Company by 15.4 and 0.4 percentage points, respectively.
The Indian Hotels Company (IHCL), operator of the Taj, Vivanta, and Ginger brands, has seen its share price rise by 20.3% over the past year, driven by 80% occupancy and new hotel openings.
The company plans to invest Rs 5,000 crore over the next five years to double its hotel count to 700 hotels by FY30, up from its current 381 hotels. Since 2017, it has increased its capital-light inventory model from 26% to 43% in FY24 by reducing dependence on its owned assets. This shift has helped expand its footprint and improve profit margins by 6.8 percentage points over the past three years.
Titan Company, known for its watches, saw its share price gain 5.2% over the past year. The company, which began in 1984 as a watch manufacturer with Titan Watches, has since expanded into jewellery, eyewear, fashion accessories, and the ethnic wear segment. In FY25, the Jewellery business contributed 88.6% of its total revenue, while watches and wearables accounted for 7.7%
