Rahul Gandhi Needs More Midcaps and Value Stocks in his Portfolio

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Based on their individual personas, Prime Minister Narendra Modi comes across as a more aggressive or a bigger risk-taker than his main rival, Rahul Gandhi.

Yet, it's the latter who has a sizeable amount of his wealth invested in stocks.

As you would be aware, Rahul Gandhi recently filed his nomination papers from Wayanad in Kerala.

As a part of the process, he also disclosed his total assets amounting to Rs 20 crores. Nearly 40% i.e. Rs 8 crores is invested in stocks and mutual funds, with the ratio being 50:50 in each.

Now, Prime Minister Modi hasn't made his latest asset holding public yet but we can certainly draw conclusions from the disclosure he made a couple of years ago.

A Google search took me to an article in Economic Times dated August 2022 where it was revealed that the Prime Minister owned assets worth over Rs 2.3 crores, mostly as bank deposits.

The article further revealed that he had no investment in any bond, shares or mutual funds, and did not own any vehicle.

So, even as the BSE Sensex went up by 3x and the BSE Small Cap index by 5x on his watch, the Prime Minister himself has not cashed in on these gains.

Coming back to Rahul Gandhi, here's his stock portfolio that constitutes roughly 20% of his total disclosed assets.

There are quality names on the list. We also liked the fact that an overwhelming 76% of the portfolio comprises of largecaps.

Smallcaps and microcaps make up 21% of the portfolio while midcaps constitute only 3%.

We are of the view that a properly balanced portfolio should be split 60:30:10 between largecaps, midcaps, and smallcaps.

This is just a broad thumb rule to ensure protection against a huge drawdown as well as steady wealth creation over the long term.

Hence, when viewed from this vantage point, the portfolio certainly needs a rejig where some capital can be diverted from both largecaps as well as smallcaps and into midcaps.

We also had a chance to compare the valuation of most of the portfolio companies vis-a-vis their own 10-year averages. Our takeaway is that most of these stocks are either trading close to their long-term PE multiples or significantly higher.

There were very few stocks trading at a sizeable discount to their historical multiples.

You see, returns from stocks come from expansion in PE multiples, growth in earnings, and dividend yield.

Rahul Gandhi's portfolio stocks seem to be betting a bit on growth in earnings for generating returns as there is limited scope for multiple expansion from here on.

I think this is true for most investors in quality stocks these days. The entire market is betting on strong earnings growth to continue, failing which, there could be a market-wide selling pressure in the near term.

So, this was our brief observation on the stocks in Rahul Gandhi's portfolio. He perhaps needs more midcaps in there and he also needs a few value stocks as the portfolio seems pre-dominantly a growth oriented one.

What do you think?

Share your thoughts on Rahul Gandhi's stock portfolio here.

Warm regards,


Rahul Shah
Editor and Research Analyst, Profit Hunter