Saurabh Mukherjea Little Champs Portfolio outperforms BSE 500

[Ravi]

Saurabh Mukherjea says that after 6 years of launching Little Champs Portfolio, he has realized the mistakes which led to underperformance of the Portfolio (13.95% vs 18.4% for BSE 500). He has made corrections & the Portfolio is now outperforming in past 3 Mth (11.89% vs 4.44%)

"After enjoying a splendid run in the first three years of its inception, Little Champs portfolio’s (LCP) returns and earnings growth deteriorated from September 2022 – March 2024. On LCP’s 6th anniversary we focus on what went wrong during this period, the lessons learnt and the course correction we undertook around 18 months ago. The steady improvement in portfolio earnings and returns in recent quarters suggests that we are on the right track now. The current portfolio is well placed to address our concerns around weak earnings growth and high valuations for broader small-midcaps in general."


Reflections on the eve of Little Champs’ 6th anniversary

Today i.e 29th August 2025, Little Champs Portfolio (LCP) completes 6th year of its existence. Three years ago, we published a newsletter (https://tinyurl.com/Marcellus-LCP) reflecting on LCP’s splendid three years of compounding returns and earnings. However, unfortunately, that upcycle came to an abrupt halt the very next month (September 2022). The next 1.5 years saw portfolio performance turn out to be opposite of the preceding three years – with deterioration in both the earnings growth and returns. In this 6th anniversary newsletter, we reflect on our actions during this painful period and the course correction we have undertaken over the past 18 months to bring the portfolio performance back on track.

Basis our internal reviews and analysis of the portfolio, the following three reasons stand out for the underperformance in returns and earnings over the Sep 2022-March 2024 period:

A. Persisting with heavy positions in some stocks despite deteriorating fundamentals & high valuations
The top ten portfolio stocks, weighted by allocation, delivered a median return (non-annualised) of -21% (average -10%) over September 2022 to March 2024. This was obviously one of the biggest drags on the portfolio’s returns.