What to expect from Marcellus’ Kings of Capital PMS?

Over the past decade, India’s Financial Services sector has been hammered by demonetisation, the ILFS crisis, Yes Bank’s collapse and the Covid crisis putting extreme pressure on weak lenders. However, history shows that investing in high quality financial stocks during a crisis proves to be highly rewarding. The key objective of our “Kings of Capital” strategy is to own a portfolio of 10 to 14 high quality Financial companies (banks, NBFCs, life insurers, general insurers, asset managers, brokers) that have good corporate governance, prudent capital allocation and high barriers to entry. These companies have grown at healthy growth rates of 20%+ despite macro headwinds over the past five years, we expect these companies to grow at 20-25% supported by market share gains over the next five years.

Who should invest in this PMS?

Clients with a time horizon of at least 3 to 5 years who want to invest in high quality financial companies with an expected long-term compounding of 20-25% should invest in this PMS. Any crisis sees the stock prices of financial companies go through a steep correction due to (i) reduction in growth rates (ii) increase in NPAs and (iii) compression of valuation multiples. As the crisis recedes, high quality lenders are able to improve growth rates on the back of market share gains, asset quality normalises and resultantly valuation multiples also normalise. Kings of Capital is therefore an ideal product for investors who want to benefit from these tailwinds as we emerge from the Covid crisis.