Absolute return simply measures total growth: (End − Start) / Start. It ignores how long the money took to get there.
CAGR — Compound Annual Growth Rate — annualises that growth: CAGR = (End / Start)^(1/years) − 1. It tells you the steady yearly rate that would have produced the same result.
An example
₹1,00,000 growing to ₹2,00,000 is a 100% absolute return either way. Over 3 years that's a CAGR of about 26% — excellent. Over 12 years it's about 6% — below what a simple debt fund might have delivered.
Always compare funds on CAGR over the same period, and against the fund's own benchmark.