From rulers to challengers: Marcellus CEO backs mid-sized firms

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₹50 crore) and potentially challenging India's largest corporations, or 'rulers', said Mukherjea. “Over the last 12 months, CCP underwent a significant increase in allocation to companies (from 10% previously to over 50% currently) which have seeded new business optionalities through capital allocation decisions over the last 3-5 years," according to Mukherjea’s May 2024 portfolio update.

"These new business optionalities are expected to add incremental revenue growth drivers over the next 2-3 years, thereby helping accelerate the overall company’s earnings growth to well above 20% CAGR (in some cases, even higher than 25% CAGR)," it added. Mukherjea counts companies such as Trent and Tube Investments among challenger companies.

“After the addition of Trent, Astral and Narayana Health in FY24, during FY25 till date (since 1 April 2024) we have added three new stocks to the portfolio—Tube Investments, Cholamandalam Investment and Finance, and Eicher Motors," according to the May 2024 update to Mukherjea’s Consistent Compounders Portfolio. The unravelling of China’s economic dominance will also contribute to the growth of India’s challenger companies, he added.

However, despite these strategic shifts, Mukherjea's Portfolio Management Service (PMS) has faced challenges recently, seeing outflows due to underperformance. As of May 31, 2024, his flagship Consistent Compounders Strategy has delivered only a 12% return over the past year, compared to 23% for the Nifty 50.

His other strategies, Rising Giants, Little Champs, and Kings of Capital Portfolio, have shown returns of 11.5%, 4%, and 10.6%, respectively, all trailing behind the Nifty 50 and Nifty 500, which have risen by 34.7%. This underperformance has been consistent