Saurabh Mukherjea-led Marcellus adds Trent, Rainbow Children’s Medicare to its portfolios

During the first five months of FY24, we have witnessed a strong performance of Marcellus’ CCP portfolio as share prices catch up with underlying fundamental progression of the portfolio companies. Despite this, the gap between fundamentals of our portfolio companies and their share prices is over 25 percent currently, said Marcellus.

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26 Aug, 2025 12:21

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Saurabh Mukherjea-led Marcellus Investment Managers said that it had added apparel retailer Trent to its Consistent Compounders Portfolio during August and Rainbow Children’s Medicare to the Little Champs portfolio.

Consistent Compounders is the flagship portfolio that invests primarily in largecap stocks that have high cashflow. Little Champs portfolio invests primarily in smallcap stocks.

Trent is a retail business with successful formats like Westside and Zudio, and a joint venture (JV) with Zara (49 percent owned by Trent). Marcellus reasoned that the competitive advantages of Trent lie in its end-to-end control of supply chain and product development – which translates into greater value-for-money proposition for customers, relevant of the merchandise and hence inventory turns (6x) which are the best in the industry.

“Once these strengths were developed for Westside, formats like Zudio have subsequently been built on the same tenets through usage of common vendors, warehousing, and logistics at the back end and common store opening teams at the front-end,” said the fund management team at Marcellus.

Rainbow, on the other hand, is a multi-specialty children’s hospital along with maternity is one of its kind models in India and ticks all the boxes from a customer convenience and experience perspective. Rainbow’s 24*7 doctor availability and its ability to attract and retain high quality pediatricians across specialties led to its stellar brand creation in Hyderabad and is their competitive advantage.

“Rainbow’s scale allows it to retain the existing talent as well as run one of India’s largest govt. approved fellowship programmes for DNB pediatrics to create a continuous talent pipeline for fresher pediatric specialists. This flywheel is difficult to replicate for any new entrant in Rainbow’s core markets,” said Marcellus in a note.

Valuation gap

Marcellus said, going forward, it sees normalised revenues and profit growth (i.e. normalised for Covid base effects, commodity price base effects etc) being reported by our portfolio companies from Q2FY24 onwards for Consistent Compounders, which should reflect the outcomes of initiatives taken by the management teams to strengthen their businesses during the last three years.

“During the first five months of FY24, we have witnessed a strong performance of Marcellus’ CCP portfolio as share prices catch up with underlying fundamental progression of the portfolio companies. Despite this, the gap between fundamentals of our portfolio companies and their share prices is over 25 percent currently,” said Marcellus. “We expect this gap to narrow down significantly in the coming quarters.”

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