New Delhi, Oct. 22 -- After five years of 27% returns, Marcellus Investment Managers' flagship portfolio delivered just 2% over the next four. The experience taught the team three lessons: rebalance systematically, diversify beyond consumer and financial services, and buy good businesses after sharp corrections, said Saurabh Mukherjea, the firm's founder.

"We may not get every switch right, but getting three out of five right can improve returns, as seen this year compared with 2022-25," he said.

For instance, Marcellus trimmed Trent after its share price outpaced profit growth, booking substantial gains while retaining a large position. It later built a position in CarTrade after the stock halved from its IPO price, having researched a...