Strategy Series

Our articles specific to the six 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
‘Capitalism Without Capital’ Fuels CCP

Capitalism without capital, i.e., the growing prominence of companies who are plays on intellectual rather than physical assets, is now increasingly prominent in India. Marcellus’ Consistent Compounder Portfolio (CCP) is actively participating in this theme. Over the past 5 years, profits of companies in our current CCP portfolio have grown at a significantly faster pace […]

NOV 09 . 16 MIN READ READ MORE
Consistent Compounders JUL 05 . 13 MIN READ
CCP’s Amplified Exposure to ‘Enterprising Compounders’
Consistent Compounders MAR 08 . 9 MIN READ
Rich rewards from Investing in Quality during the Toughest Phase
Consistent Compounders JAN 06 . 8 MIN READ
A Retailer’s Path to Consistent Compounding
Consistent Compounders
‘Capitalism Without Capital’ Fuels CCP

Capitalism without capital, i.e., the growing prominence of companies who are plays on intellectual rather than physical assets, is now increasingly prominent in India. Marcellus’ Consistent Compounder Portfolio (CCP) is actively participating in this theme. Over the past 5 years, profits of companies in our current CCP portfolio have grown at a significantly faster pace […]

Nov 09 . 16 MIN READ READ MORE
Consistent Compounders
CCP’s Amplified Exposure to ‘Enterprising Compounders’

Businesses with strong competitive advantages (and hence high ROCEs), can be categorized into different types based on their capital allocation decisions. Amongst these, the most enterprising ones (the ‘enterprising compounders’) are those which reinvest capital not only to strengthen and evolve their core business, but also to scale up new businesses consistently. Shareholder returns from such businesses […]

Jul 05 . 13 MIN READ READ MORE
Consistent Compounders
Rich rewards from Investing in Quality during the Toughest Phase

Long periods of outperformance by quality firms are often characterized by intermittent periods of severe underperformance – something that has been unavoidable by even the likes of Warren Buffet. Such underperformance was especially prominent during three instances (first half of 1970s, Mar’99-Aug’00 & Nov’04-Apr’06) wherein Berkshire Hathaway’s underperformance was in high double digits even as […]

Mar 08 . 9 MIN READ READ MORE
Consistent Compounders
A Retailer’s Path to Consistent Compounding

Over an extended period of time, it is hard to make money in Retailing. In this newsletter, we discuss a subset of retailing – apparel retailing – and how the principles that underpin the business models of consistent compounders in general are of relevance for success in apparel retailing as well. Two key variables – […]

Jan 06 . 8 MIN READ READ MORE
Global Compounders
Global Compounders Portfolio: N.I.M.B.Y. Investing! – Turning Waste into Wealth

Marcellus’ Global Compounders Portfolio (GCP) strategically invests in 25-30 deeply moated global companies aligned with megatrends, fostering a consistent mid to high teens compounding of free cash flow/earnings. Investing globally, particularly in the US, is often equated with technology companies. While the US is home to iconic tech giants, exceptional value creation has occurred across […]

OCT 30 . 12 MIN READ READ MORE
Global Compounders AUG 20 . 6 MIN READ
Global Compounders Portfolio: Update on Favourable Policy/Regulatory Change
Global Compounders MAY 09 . 11 MIN READ
Global Compounders Portfolio: The Four Pillars of American Capitalism
Global Compounders FEB 12 . 9 MIN READ
Global Compounders Portfolio: Resilience Amidst Chaos
Global Compounders
Global Compounders Portfolio: N.I.M.B.Y. Investing! – Turning Waste into Wealth

Marcellus’ Global Compounders Portfolio (GCP) strategically invests in 25-30 deeply moated global companies aligned with megatrends, fostering a consistent mid to high teens compounding of free cash flow/earnings. Investing globally, particularly in the US, is often equated with technology companies. While the US is home to iconic tech giants, exceptional value creation has occurred across […]

Oct 30 . 12 MIN READ READ MORE
Global Compounders
Global Compounders Portfolio: Update on Favourable Policy/Regulatory Change

Marcellus’ Global Compounders Portfolio (GCP) strategically invests in 25-30 deeply moated global companies aligned with megatrends, fostering a consistent mid to high teens compounding of free cash flow/earnings. This portfolio is agnostic to market cap or sectors, and targets to deliver excess return through different periods in the cycle. As India catapults into the most […]

Aug 20 . 6 MIN READ READ MORE
Global Compounders
Global Compounders Portfolio: The Four Pillars of American Capitalism

Marcellus’ Global Compounders Portfolio (GCP) strategically invests in 25-30 deeply moated global companies aligned with megatrends, fostering a consistent mid to high teens compounding of free cash flow/earnings. A large part of our portfolio comprises of American firms, and for good reason. Over the last 30 years, US equities have demonstrated exceptional ability to generate […]

May 09 . 11 MIN READ READ MORE
Global Compounders
Global Compounders Portfolio: Resilience Amidst Chaos

Marcellus’ Global Compounders Portfolio (GCP) strategically invests in 25-30 deeply moated global companies aligned with megatrends, fostering a consistent mid to high teens compounding of free cash flow/earnings. Amidst an increasingly uncertain global macro landscape, our proprietary Torque based positioning favors defensive stocks that deliver higher than GDP growth with low earnings volatility – as […]

Feb 12 . 9 MIN READ READ MORE
Kings of Capital
Prudent Corporate: The tollbooth for Indian SIPs

Prudent Corporate, India’s third-largest mutual fund distributor, has grown revenues and EPS by 29% and 46% respectively over FY19-24. During this period, Prudent has risen from being the 7th largest distributor to being the 3rd largest in FY24, surpassing giants such as HDFC Bank and ICICI Bank in terms of mutual fund commissions earned. Prudent’s success can […]

AUG 06 . 7 MIN READ READ MORE
Kings of Capital APR 08 . 8 MIN READ
How Will Tight System Liquidity Impact KCP?
Kings of Capital DEC 09 . 8 MIN READ
Kings of Capital Portfolio Newsletter: Quality lenders to benefit from RBI’s credit shakeout
Kings of Capital SEP 07 . 11 MIN READ
Learning from history: Discounting in Financial Services is a bad strategy
Kings of Capital
Prudent Corporate: The tollbooth for Indian SIPs

Prudent Corporate, India’s third-largest mutual fund distributor, has grown revenues and EPS by 29% and 46% respectively over FY19-24. During this period, Prudent has risen from being the 7th largest distributor to being the 3rd largest in FY24, surpassing giants such as HDFC Bank and ICICI Bank in terms of mutual fund commissions earned. Prudent’s success can […]

Aug 06 . 7 MIN READ READ MORE
Kings of Capital
How Will Tight System Liquidity Impact KCP?

Given consistently strong credit demand and weak deposit growth, we are now staring at a tough funding environment with banking sector credit to deposit ratio at an all-time high of ~80%. This funding environment along with consistent regulatory action will separate the men from the boys in the upcoming quarters leading to divergent growth outcomes […]

Apr 08 . 8 MIN READ READ MORE
Kings of Capital
Kings of Capital Portfolio Newsletter: Quality lenders to benefit from RBI’s credit shakeout

To curb systemic risk posed by the sharp growth in unsecured credit and NBFC credit in the banking system, the RBI raised risk weights on both from 100% to 125%, effectively asking lenders to set aside more equity capital for these credit risks. This move is likely to have highest impact on business models of […]

Dec 09 . 8 MIN READ READ MORE
Kings of Capital
Learning from history: Discounting in Financial Services is a bad strategy

History shows that competing only on the basis of price either as a lender or as an insurer has inevitably led to heavy losses and in some cases to bankruptcy. In this newsletter, we discuss how PSU general insurers in their quest to gain market share, cut pricing in group health insurance for 5+ years […]

Sep 07 . 11 MIN READ READ MORE
Little Champs
Little Champs: Spotlighting Godrej Agrovet

This month we delve deeper into Godrej Agrovet Limited (GAVL) which we added to the Little Champs portfolio earlier this year. GAVL is a diversified agri-focussed company present across animal feed, palm oil, crop protection, dairy and poultry businesses. The Company witnessed muted earnings growth over FY18-23 due to volatility in commodity prices (inputs as well as […]

OCT 01 . 6 MIN READ READ MORE
Little Champs JUN 21 . 14 MIN READ
Spotlighting Eureka Forbes
Little Champs FEB 27 . 10 MIN READ
Spotlighting Rainbow Children’s Medicare
Little Champs NOV 10 . 11 MIN READ
Reinvesting Profits Back into the Business
Little Champs
Little Champs: Spotlighting Godrej Agrovet

This month we delve deeper into Godrej Agrovet Limited (GAVL) which we added to the Little Champs portfolio earlier this year. GAVL is a diversified agri-focussed company present across animal feed, palm oil, crop protection, dairy and poultry businesses. The Company witnessed muted earnings growth over FY18-23 due to volatility in commodity prices (inputs as well as […]

Oct 01 . 6 MIN READ READ MORE
Little Champs
Spotlighting Eureka Forbes

In this month’s newsletter, we delve deeper into Eureka Forbes Limited (EFL) one of the new additions to the portfolio. We see several earnings growth levers for EFL over the next 5 years: (a) Increase in the water purifiers (WP) category penetration backed by improved tap water supply, and initiatives taken by the WP companies […]

Jun 21 . 14 MIN READ READ MORE
Little Champs
Spotlighting Rainbow Children’s Medicare

In this month’s Little Champs newsletter, we delve deeper into Rainbow Children’s Medicare (Rainbow), one of the new additions to the portfolio. Rainbow, founded in Hyderabad in 1999 by Dr Ramesh Kancharla, focusses only on pediatric and maternity care. The Company stands head & shoulders above its like-to-like peers on profitability and growth metrics and […]

Feb 27 . 10 MIN READ READ MORE
Little Champs
Reinvesting Profits Back into the Business

Marcellus’ Little Champs portfolio (LCP) aims to discover companies with a high probability of entry into benchmark BSE500 index over the next 3-5 years thus capturing the outsized returns that accrue to such potential entrants. Over the past year, some of the LCP stocks have faced temporary headwinds mainly on account of Covid-19 demand normalization, inventory […]

Nov 10 . 11 MIN READ READ MORE
Marcellus Erudite
Portfolio performance and update on fundamentals

Note: For all strategies except GCP, Performance data shown is net of fixed fees and expenses charged till September 30th, 2024 and is net of annual performance fees (Except for Little Champs Portfolio) charged for client accounts whose account anniversary/performance calculation date falls upto the last date of this performance period. Since, for Little Champs Portfolio, […]

NOV 08 . 17 MIN READ READ MORE
Marcellus Erudite OCT 09 . 10 MIN READ
Portfolio Performance and Update on Fundamentals – September 2024
Marcellus Erudite SEP 20 . 12 MIN READ
Portfolio Performance and Update on Fundamentals – August 2024
Marcellus Erudite AUG 20 . 11 MIN READ
Portfolio Performance and Update on Fundamentals – July 2024
Marcellus Erudite
Portfolio performance and update on fundamentals

Note: For all strategies except GCP, Performance data shown is net of fixed fees and expenses charged till September 30th, 2024 and is net of annual performance fees (Except for Little Champs Portfolio) charged for client accounts whose account anniversary/performance calculation date falls upto the last date of this performance period. Since, for Little Champs Portfolio, […]

Nov 08 . 17 MIN READ READ MORE
Marcellus Erudite
Portfolio Performance and Update on Fundamentals – September 2024

Consistent Compounders Portfolio (CCP) Performance of Marcellus’ CCP portfolio has turned a corner in absolute returns over the last 18 months (31% CAGR) and in relative returns over the last six months (20.78% for CCP vs 16.58% for Nifty50 TRI). This is attributed to both the upgrades made to our portfolio construction approach as well […]

Oct 09 . 10 MIN READ READ MORE
Marcellus Erudite
Portfolio Performance and Update on Fundamentals – August 2024

Consistent Compounders Portfolio (CCP) Performance of Marcellus’ CCP portfolio has turned a corner in absolute returns over the last 18 months and in relative returns (relative to Nifty50 TRI) over the last six months. This is attributed to both the upgrades made to our portfolio construction approach as well as to the strong performance of […]

Sep 20 . 12 MIN READ READ MORE
Marcellus Erudite
Portfolio Performance and Update on Fundamentals – July 2024

          Note: For all strategies except GCP, performance data is net of annual performance fees charged for client accounts whose account                anniversary date falls up to the last date of this performance period. Since fixed fees and expenses are charged on a quarterly basis,  […]

Aug 20 . 11 MIN READ READ MORE
MeritorQ Advisory
MeritorQ: Profiting from the Dislocation in Indian Megacaps

Although India’s 20 most profitable listed companies (the ‘Megacaps’) account for around 50% of the profits generated by the BSE 500 companies, these Megacaps account for just 34% of the BSE500’s market cap (down from 41% a decade ago and 45% nearly two decades ago). Indian retail investors’ fascination with small caps seems to be […]

APR 19 . 6 MIN READ READ MORE
MeritorQ Advisory FEB 21 . 7 MIN READ
Rebalancing and the Value Effect
MeritorQ Advisory NOV 21 . 9 MIN READ
The Risks of Owning an Individual Stock
MeritorQ Advisory OCT 10 . 6 MIN READ
Why Fundamentals and Valuations Matter
MeritorQ Advisory
MeritorQ: Profiting from the Dislocation in Indian Megacaps

Although India’s 20 most profitable listed companies (the ‘Megacaps’) account for around 50% of the profits generated by the BSE 500 companies, these Megacaps account for just 34% of the BSE500’s market cap (down from 41% a decade ago and 45% nearly two decades ago). Indian retail investors’ fascination with small caps seems to be […]

Apr 19 . 6 MIN READ READ MORE
MeritorQ Advisory
Rebalancing and the Value Effect

In this newsletter, we quantify the contribution of rebalancing to overall returns by breaking down the portfolio returns into sub-components. We find that periodic rebalancing drives most of the returns of systematic relative value strategies. Selecting quality, undervalued companies, as we do in MeritorQ’s selection step, is effective only when the portfolio is regularly rebalanced. […]

Feb 21 . 7 MIN READ READ MORE
MeritorQ Advisory
The Risks of Owning an Individual Stock

The majority of the listed companies in India fail to beat the market cap weighted index. In this newsletter, we discuss why the odds are stacked against an individual investor owning a small set of stocks. Over a longer investment horizon, returns of benchmark indices as well as the net wealth created in stock markets […]

Nov 21 . 9 MIN READ READ MORE
MeritorQ Advisory
Why Fundamentals and Valuations Matter

MeritorQ’s strategy of picking high-quality undervalued companies delivers better risk adjusted returns by taking advantage of mispricing associated with erroneous investor expectation. Such a strategy also delivers positive excess returns (i.e., returns in excess of the benchmark, in this case the BSE 500) around earnings dates further reaffirming the mispricing hypothesis. In fact, a significant […]

Oct 10 . 6 MIN READ READ MORE
MeritorQ PMS
MeritorQ: CAPE Fear

In this newsletter, we look at current market valuation levels implied by the cyclically adjusted price to earnings ratio (CAPE). Going by past history, our analysis suggests that at current CAPE levels, Indian investors should be more cautious on forward-looking market returns. Irrespective of market valuation, we believe MeritorQ’s low-risk approach of picking profitable, low-debt […]

SEP 07 . 5 MIN READ READ MORE
MeritorQ PMS MAR 15 . 9 MIN READ
MeritorQ: A Deeper In-Depth Look At MeritorQ’s Forensic Model
MeritorQ PMS FEB 13 . 11 MIN READ
MeritorQ: Forensic Accounting Using Quant Methods Boosts Returns
MeritorQ PMS JAN 11 . 10 MIN READ
MeritorQ: The Power of Checklists
MeritorQ PMS
MeritorQ: CAPE Fear

In this newsletter, we look at current market valuation levels implied by the cyclically adjusted price to earnings ratio (CAPE). Going by past history, our analysis suggests that at current CAPE levels, Indian investors should be more cautious on forward-looking market returns. Irrespective of market valuation, we believe MeritorQ’s low-risk approach of picking profitable, low-debt […]

Sep 07 . 5 MIN READ READ MORE
MeritorQ PMS
MeritorQ: A Deeper In-Depth Look At MeritorQ’s Forensic Model

MeritorQ uses forensic ratios to evaluate the accounting quality of Indian companies. As we highlighted in our February newsletter – Forensic Accounting Using Quant Methods Boosts Returns – our accounting checks can identify accounting frauds well in advance of the actual drawdown event. Using the specific examples of two companies in this newsletter, we discuss how accounting […]

Mar 15 . 9 MIN READ READ MORE
MeritorQ PMS
MeritorQ: Forensic Accounting Using Quant Methods Boosts Returns

Over the past 16 years, the average return of market cap weighted BSE 500 index has been 10.3% p.a. on a 3-year rolling basis. But the story changes completely when we differentiate between the index constituents based on their accounting quality. There is a clear deterioration in returns and a rapid increase in risk and […]

Feb 13 . 11 MIN READ READ MORE
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 READ MORE
Rising Giant
Rising Giants: Spotlighting Godrej Agrovet

This month we delve deeper into Godrej Agrovet Limited (GAVL) which we added to the Rising Giants PMS portfolio earlier this year. GAVL is a diversified agri-focussed company present across animal feed, palm oil, crop protection, dairy and poultry businesses. The Company witnessed muted earnings growth over FY18-23 due to volatility in commodity prices (inputs as well […]

OCT 01 . 6 MIN READ READ MORE
Rising Giant JUL 08 . 14 MIN READ
Rising Giants: Spotlighting Eureka Forbes
Rising Giant NOV 18 . 14 MIN READ
Stress Test for Rising Giants
Rising Giant AUG 07 . 10 MIN READ
Invest in Dominant B2B Firms in Highly Profitable Industries
Rising Giant
Rising Giants: Spotlighting Godrej Agrovet

This month we delve deeper into Godrej Agrovet Limited (GAVL) which we added to the Rising Giants PMS portfolio earlier this year. GAVL is a diversified agri-focussed company present across animal feed, palm oil, crop protection, dairy and poultry businesses. The Company witnessed muted earnings growth over FY18-23 due to volatility in commodity prices (inputs as well […]

Oct 01 . 6 MIN READ READ MORE
Rising Giant
Rising Giants: Spotlighting Eureka Forbes

In this month’s newsletter, we delve deeper into Eureka Forbes Limited (EFL) one of the new additions to the portfolio. We see several earnings growth levers for EFL over the next 5 years: (a) Increase in the water purifiers (WP) category penetration backed by improved tap water supply, and initiatives taken by the WP companies […]

Jul 08 . 14 MIN READ READ MORE
Rising Giant
Stress Test for Rising Giants

Marcellus’ Rising Giants portfolio (RGP) aims to discover companies with a high probability of entry into benchmark Nifty50 index over the next 3-5 years thus capturing the outsized returns that typically accrue to potential Nifty50 entrants. Over the past year, some of the RGP stocks have faced temporary headwinds mainly on account of Covid-19 demand normalization, […]

Nov 18 . 14 MIN READ READ MORE
Rising Giant
Invest in Dominant B2B Firms in Highly Profitable Industries

The industry in which B2B firms operate can have an outsized impact on their compounding potential. Over FY14-23, some sectors like IT, Light Industrials and Chemicals have generated twice as much RoCE and share price returns as compared to sectors like Energy and Metals & Mining (which struggle to return even cost of capital). This […]

Aug 07 . 10 MIN READ READ MORE

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FEATURED PODCAST

Marcellus Consistent Compounder Portfolio Webinar on Amidst high input cost inflation, pricing power protects margins & market share
Amidst high input cost inflation, pricing power protects margins & market share of CCPs
Mar 10, 2022 READ MORE

FEATURED VIDEOS

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CCP Webinar: ‘Enterprising Compounders’ = Capitalism Without Capital
Nov 14, 2024
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Behold the Leviathan – The Unsual Rise of Modern India
Oct 21, 2024

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Consistent Compounders
Portfolio Performance and Update on Fundamentals July

  Consistent Compounders Portfolio (CCP) Fundamentals of CCP companies have delivered healthy progress in FY23, with weighted average PAT (profits after tax) growth of 20% YoY in FY23, backed by a revenue growth of 19% YoY in FY23. 1QFY24 results reported so far have exhibited exceptional strength, representative of market share gains from competitors and […]

Aug 16 . 5 MIN READ READ MORE
Consistent Compounders
Modern Utilities Operating on a Global Scale Make for Lucrative Investments.

Marcellus’ Global Compounders Portfolio (GCP) focuses on investing in 25-30 highly fortified global companies listed mostly in developed markets. These companies align with global megatrends and possess robust moats built around process capability, research and development, and capital allocation. These factors play a pivotal role in driving the consistent compounding for GCP companies. Over time, […]

Jul 09 . 12 MIN READ READ MORE
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 READ MORE

FEATURED BLOGS

Outsourcing 2.0: The Global Capability Centre Boom in India
Oct 26 . 7 MIN READ READ MORE
Busting Popular Macroeconomic Myths
  • BEHAVIOUR
  • CULTURE
Feb 21 . 5 MIN READ READ MORE
Asian Paints vs Sherwin Williams: Different Paths to Dominance
  • BEHAVIOUR
  • CULTURE
Jan 25 . 10 MIN READ READ MORE

Recommended Reads

Some of our best reads you shouldn’t miss on Marcellus

‘Capitalism Without Capital’ Fuels CCP
Nov 09 . 16 MIN READ READ MORE
Portfolio performance and update on fundamentals
Nov 08 . 17 MIN READ READ MORE
Global Compounders Portfolio: N.I.M.B.Y. Investing! – Turning Waste into Wealth
Oct 30 . 12 MIN READ READ MORE

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