How to Find Financial Stocks the Market Is Missing Saurabh Mukherjea x Tej SHah

Invest in India's leading financial companies. Explore Kings of Capital Portfolio: https://kcp.marcellus.inWhat does it take to find opportunities in one of India's most closely watched sectors?In this episode of Coffee & Investing, Saurabh Mukherjea speaks with his colleague Tej Shah, Portfolio Manager of Marcellus’ Kings of Capital Portfolio, about how the team invests across India’s financial services sector, and why some of the most interesting opportunities may lie beyond the obvious names.Kings of Capital is not simply a portfolio of banks and lenders. High-quality lenders make up only around a quarter of the portfolio, while a significant portion is invested in non-lending financial businesses such as asset managers, wealth managers, credit rating agencies, commodity exchanges, mutual fund distributors and financial infrastructure companies.The conversation explores how Tej and the team look for "variant perception" — situations where their assessment of a business or industry differs meaningfully from the broader market.One example is the team's investment in microfinance during the sector's 2025 downturn. While pessimism around the industry was widespread, ground-level research led the team to believe that the problems were cyclical and that stronger institutions could emerge with greater market share.Saurabh and Tej also discuss why KCP has historically maintained a low allocation to large banks and zero exposure to PSU banks and PSU NBFCs, how the team researches its 35-stock universe, and the importance of management quality, profitability, balance-sheet strength and sensible valuations.The episode also looks ahead to a potentially tougher interest-rate and credit environment — and why Tej believes that could create an environment where high-quality financial businesses and the KCP investment approach stand out.---💡 Key Takeaways⮞ Beyond Banks: Why Kings of Capital invests across lenders, insurers, asset managers, wealth managers and financial infrastructure businesses.⮞ The Variant Perception Edge: How identifying situations where the market may be excessively pessimistic can create investment opportunities.⮞ Research Beyond the Sell-Side: How KCP uses management networks, industry experts and ground-level channel checks to understand businesses.⮞ What Makes a Great Financial Business: Why profitability, sustainable growth, management quality and the ability to navigate multiple cycles matter.⮞ Valuation Discipline: Why even high-quality businesses need to be bought at sensible valuations rather than at any price.⮕ Learning from Microfinance: How research on the ground helped KCP identify an opportunity during the 2025 microfinance downturn.⮞ Preparing for Tougher Cycles: Why asset quality could become more important than margins if the interest-rate and credit cycle turns.---💼 Invest with MarcellusIf you believe long-term wealth creation comes from owning high-quality businesses through different market cycles, explore Marcellus’ Kings of Capital Portfolio.Explore Kings of Capital: https://kcp.marcellus.in---💼 About Marcellus Investment ManagersMarcellus Investment Managers is a SEBI, US SEC, and IFSCA registered portfolio manager. At Marcellus, our Purpose is to make wealth creation simple and accessible by being trustworthy and transparent capital allocators.Discover our approach to investing here: www.marcellus.in---Chapters00:00:00 Coming Up00:00:50 Kings of Capital: Beyond Lenders00:02:23 KCP’s Track Record & The First Three Years00:05:20 Finding Variant Perception00:06:45 The Microfinance Opportunity00:10:15 How KCP Researches Financial Businesses00:12:00 What KCP Looks For — And What Comes Next