Rising Giants portfolio of top 15 small-cap and mid-cap stocks

The Rising Giants portfolio of top 15 small-cap and mid-cap stocks is managed by Saurabh Mukherjea of Marcellus PMS Fund. The Fund invests primarily in quality mid-sized companies (less than INR75,000 crores market-capitalisation, predominantly in the INR 7,000 crores – INR 75,000 crores range) with:

1) Well moated dominant franchises in niche segments;

2) A track record of prudent capital allocation with high reinvestment in the core business and continuous focus on adjacencies for growth; and

3) Clean accounts and corporate governance. From a universe of ~450 companies in this segment, a portfolio is constructed of 15-20 companies which make it past Marcellus’ proprietary forensic accounting & capital allocation filters as well as our bottom-up stock selection & position sizing frameworks.

Performance update for the Rising Giants PMS

Rising Giants delivered healthy earnings growth in yet another challenging year (FY22)

Track record of delivering healthy fundamentals through cycles

A salient feature of the Rising Giants portfolio companies has been their ability to sustain fundamental performance through the various macro cycles. For instance, over FY13 to FY21, despite intermittent macro slowdowns and disruptions such as demonetisation, GST & Covid-19, the portfolio companies generated healthy earnings growth both on an absolute basis and relative to benchmark BSE500 median.

The Rising Giants portfolio’s NAV has declined by 19.4% since inception until May 31, 2022. The stock-wise absolute returns for three and six months ending May 31, 2022 are presented in the exhibit below:

Portfolio company
Absolute share price change
3 months ending May 31, 2022 6 months ending May 31, 2022
Aavas -21% -21%
Alkyl Amines -8% -12%
Astral -9% -22%
Cholamandalam 0% 22%
Dr. Lal Pathlabs -17% -44%
Galaxy Surf. 3% 0%
GMM Pfaudler. -3% -6%
Grindwell 7% 3%
ICICI Lombard 2% -12%
Info Edge -9% -30%
LTTS -23% -35%
Page 9% 19%
Relaxo -17% -23%
Suprajit 13% -18%
V-Mart -4% -15%

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