Strategy Series

Our articles specific to the four investment strategies we offer. Whether you invest with us or are looking to invest, these
articles can you give you an insight into why we make the decisions we make.

Consistent Compounders
When ‘Loss Aversion’ Meets ‘Time Horizons’ in Equity Investing

Investors’ decision making is often underpinned by a key psychological trait – loss aversion. As explained by  Noble laureate Daniel Kahneman, the result of ‘loss aversion’ is that our pain from losses is more than twice  the joy from equal amounts of gain. Juxtaposing this idea to the CCP investing approach discussed in our  book […]

Consistent Compounders JAN 06 . 11 MIN READ
Divis: Greatness in Indian Pharma
Consistent Compounders DEC 02 . 7 MIN READ
Four years of CCP: 98.2% total returns, 18.6% CAGR
Consistent Compounders NOV 05 . 10 MIN READ
Think First Principles, then Disrupt & Dominate
Consistent Compounders
When ‘Loss Aversion’ Meets ‘Time Horizons’ in Equity Investing

Investors’ decision making is often underpinned by a key psychological trait – loss aversion. As explained by  Noble laureate Daniel Kahneman, the result of ‘loss aversion’ is that our pain from losses is more than twice  the joy from equal amounts of gain. Juxtaposing this idea to the CCP investing approach discussed in our  book […]


Feb 06 . 8 MIN READ
Consistent Compounders
Divis: Greatness in Indian Pharma

It is rare to find an Indian pharma company which makes systematic investments towards building the  customer’s trust, improving compliance and ramping up manufacturing efficiency. Divis Labs is one such  company that has delivered on these fronts for almost three decades. It has been the preferred  manufacturing partner for major Western pharma companies on the […]


Jan 06 . 11 MIN READ
Consistent Compounders
Four years of CCP: 98.2% total returns, 18.6% CAGR

A review of the last four years of CCP returns highlights the consistency of performance across investee  companies – almost all constituent stocks have compounded their share prices at 15-30% annually demonstrating that stock selection contributed significantly to portfolio returns. Additionally, portfolio  management tools such as the Longevity Framework and Margin of Safety & Sustainability […]


Dec 02 . 7 MIN READ
Consistent Compounders
Think First Principles, then Disrupt & Dominate

Several CCP Portfolio companies have announced business initiatives which seek to change the paradigm of certain industries – such as Titan (Caratlane), Asian Paints (Home Décor and backward integration) and Bajaj Finance (Fintech related initiatives). All of these initiatives are already profitable with a potential to leverage the existing core strengths of these companies to […]


Nov 05 . 10 MIN READ
Kings of Capital
Boring Companies Compound Profits At 20% p.a.

Investors who’ve studied Warren Buffett and Peter Lynch know that so-called “boring” stocks can turn out to be great investments in the long run. In India, a few lenders have been able to perform consistently across cycles. However, this also makes them prey to cycles where share prices don’t tend to follow fundamentals as investors […]

Kings of Capital DEC 23 . 8 MIN READ
Avoiding Non-linear Risks Tends to be Rewarding
Kings of Capital NOV 22 . 11 MIN READ
Separating the Men from the Boys
Kings of Capital OCT 21 . 6 MIN READ
The Stars are Aligned for Indian Lenders
Kings of Capital
Boring Companies Compound Profits At 20% p.a.

Investors who’ve studied Warren Buffett and Peter Lynch know that so-called “boring” stocks can turn out to be great investments in the long run. In India, a few lenders have been able to perform consistently across cycles. However, this also makes them prey to cycles where share prices don’t tend to follow fundamentals as investors […]


Jan 23 . 8 MIN READ
Kings of Capital
Avoiding Non-linear Risks Tends to be Rewarding

When the economic climate is benign, the share prices of financial services companies do not adequately capture the risks of aggressive lending and governance practices. The true intrinsic value of such companies becomes apparent only when such risk actually play out. History shows that when the risk plays out, the market cap of such companies […]


Dec 23 . 8 MIN READ
Kings of Capital
Separating the Men from the Boys

Financial services companies in general and Indian NBFCs in specific tend to encounter a crisis every few  years. High-quality management teams not only deal with such crises but actually benefit from it. NBFCs in  India have seen three challenging events in the last six years – demonetization, the failure of a large NBFC (leading to […]


Nov 22 . 11 MIN READ
Kings of Capital
The Stars are Aligned for Indian Lenders

The fact that Indian lenders are sitting on: (i) their highest ever capital adequacy, (ii) their lowest non performing assets since the Asset Quality Review in 2015, and (iii) their highest RoAs since FY13 has been  masked by global macro uncertainties. Since private sector Indian banks are funded by growing domestic  financial savings and have […]


Oct 21 . 6 MIN READ
Little Champs
Little Champs: Spotlighting Vijaya Diagnostic

This month we place the spotlight on Vijaya Diagnostic Centre Limited (Vijaya), a leading diagnostic player in Andhra Pradesh and Telangana, and one of the few organised players to offer an integrated offering of pathology (2/3rd revenue contribution) and radiology (1/3rd share of revenues). Vijaya has consistently outperformed its integrated diagnostic peers (FY18-22 average EBITDA margin nearly […]

Little Champs NOV 29 . 12 MIN READ
Powering Through the Slowdown
Little Champs OCT 31 . 5 MIN READ
The Little Champs Are Prepared for Western Turmoil
Little Champs SEP 27 . 11 MIN READ
How Niche B2B Franchises Drive Compounding
Little Champs
Little Champs: Spotlighting Vijaya Diagnostic

This month we place the spotlight on Vijaya Diagnostic Centre Limited (Vijaya), a leading diagnostic player in Andhra Pradesh and Telangana, and one of the few organised players to offer an integrated offering of pathology (2/3rd revenue contribution) and radiology (1/3rd share of revenues). Vijaya has consistently outperformed its integrated diagnostic peers (FY18-22 average EBITDA margin nearly […]


Jan 31 . 10 MIN READ
Little Champs
Powering Through the Slowdown

In 2QFY23, Little Champs Portfolio (LCP) witnessed median revenue growth of 24% and PBT growth of 14%.  However, some portfolio companies did face headwinds around revenues (Covid-19 related revenues  tapering off, impact from price hikes) and margins (raw material and energy costs up). However, these  headwinds have been abating in recent months which should aid […]


Nov 29 . 12 MIN READ
Little Champs
The Little Champs Are Prepared for Western Turmoil

Globalisation has been an important growth driver for Little Champs. However, several headwinds  (geopolitical issues, rising energy costs and rising interest rates) in some export markets like Europe have  raised concerns around Little Champs with significant global exposure. The fact that historically the impact of crises in the West has had limited impact on Indian […]


Oct 31 . 5 MIN READ
Little Champs
How Niche B2B Franchises Drive Compounding

Given Little Champs’ philosophy of investing in smallcaps which are market leading franchises, the portfolio has a preponderance of niche B2B names. Conventional arguments against B2B companies centre around their weak bargaining power vs much larger customers & suppliers and lack of entry barriers around brands & distribution. However, unlike a typical B2B company, the […]


Sep 27 . 11 MIN READ
MeritorQ PMS
MeritorQ: The Power of Checklists

Most of us have used a checklist at some point. Humans need checklists because most of us have imperfect recall. Checklists provide a cognitive safety net. They prevent us from having to suffer due to our flaws —flaws of memory, attention, and thoroughness. Checklists have been found to be effective in performing complex tasks in varied […]

MeritorQ PMS DEC 08 . 8 MIN READ
MeritorQ: Strength Lies in Numbers
MeritorQ PMS NOV 21 . 7 MIN READ
MeritorQ: The Moneyball of Quality Investing
MeritorQ PMS
MeritorQ: The Power of Checklists

Most of us have used a checklist at some point. Humans need checklists because most of us have imperfect recall. Checklists provide a cognitive safety net. They prevent us from having to suffer due to our flaws —flaws of memory, attention, and thoroughness. Checklists have been found to be effective in performing complex tasks in varied […]


Jan 11 . 10 MIN READ
MeritorQ PMS
MeritorQ: Strength Lies in Numbers

The operational efficiency of the quantitative approach we take in MeritorQ allows us to analyze and rank  stocks over a large investment universe on a consistent set of metrics. Ranking over a large peer group of  companies magnifiesthe power of statistical analysis and hence the reliability of the screening and selection  steps. Another benefit of […]


Dec 08 . 8 MIN READ
MeritorQ PMS
MeritorQ: The Moneyball of Quality Investing

Just as the Moneyball approach in baseball (as explained by Michael Lewis in his book by the same name) helped a team of seemingly average players consistently win matches, in Marcellus’ MeritorQ, we select good quality and undervalued companies (rather than betting on singular ‘quality’ or ‘value’ investment opportunities) to deliver superior risk-adjusted returns. The […]


Nov 21 . 7 MIN READ
Rising Giant
The Cheaper They Get, The More We Buy

The long-term valuation of a company is determined by the growth and longevity of its free cash flows (FCF). Its share price, on the other hand, is heavily influenced by near term earnings/events. This creates a disconnect between the intrinsic value of the company and its share price. This disconnect has been stark for the […]

Rising Giant DEC 19 . 9 MIN READ
R-R-R-Rising Giants
Rising Giant NOV 15 . 12 MIN READ
Rising Giants’ Road to Antifragility
Rising Giant OCT 13 . 8 MIN READ
Tech as an Enabler of Free Cashflow Compounding
Rising Giant
The Cheaper They Get, The More We Buy

The long-term valuation of a company is determined by the growth and longevity of its free cash flows (FCF). Its share price, on the other hand, is heavily influenced by near term earnings/events. This creates a disconnect between the intrinsic value of the company and its share price. This disconnect has been stark for the […]


Jan 18 . 9 MIN READ
Rising Giant
R-R-R-Rising Giants

For the four quarters ending 2QFY23, the Rising Giants portfolio witnessed median revenue growth of  23% and EBITDA growth of 14%. Some portfolio companies faced headwinds around Covid-19 related  revenues tapering off and higher input prices. However, as is the norm in stockmarkets, the -16.44% price  correction in the portfolio (since inception) is extrapolating these […]


Dec 19 . 9 MIN READ
Rising Giant
Rising Giants’ Road to Antifragility

Brinton Johns & Brad Slingerlend’s 2014 paper, ‘Complexity Investing’, discusses how it’sfutile to forecast extreme event like pandemics, stockmarket crashes and tech disruptions. These events belong to complex ecosystems with unpredictable outcomes and a tendency towards polarization i.e. a few winners prevail – those who constantly adapt, keep building on their strengths and thus end […]


Nov 15 . 12 MIN READ
Rising Giant
Tech as an Enabler of Free Cashflow Compounding

Rising Giants have been at the forefront of implementing tech solutions to sustain their competitive advantages, drive efficiencies (around cost, working capital and asset utilisation) and build scalable organisations (transitioning from single to multi-product & multi-geography companies). At the same time, the relatively low-cost but high impact nature (low marginal cost & ability to scale […]


Oct 13 . 8 MIN READ

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