Motilal AMC Mid to Mega
Motilal Oswal AMC PMS | Equity | | PMSIME's View on Motilal AMC Mid to Mega
Strategy
Investment Fund
While Motilal has all the required credentials for a strong PMS strategy, their patch of underperformance in the recent history leads to a lower rating. However, the strategies have shown good signs of a turnaround in their performance after the recent addition of Prateek Agrawal (ex-CIO ASK PMS).
Fund's Strategy View
The Strategy expertise in mid-cap aims to invest in a concentrated portfolio (15-20 stocks) of top mid-cap ideas. Focusing on emerging businesses benefiting from a growth in earnings and valuations re-rating. The portfolio has minimal style drift, remaining concentrated and with exposures predominantly in mid-caps. There is a clearly defined investment philosophy of long-term investing in high-quality companies that meet Motilal's QGLP Philosophy (Quality, Growth, Longevity, Price).
Fund Performance
The fund has underperformed peers in the last 5yr trailing returns. In terms of longer-term annual performance, performance has been highly consistent, with the fund having outperformed it's benchmark in over 80% of annual calendar years.
IME's View on Motilal Oswal AMC PMS
View on AMC
Motilal PMS, co-founded by a respected investor, offers strong pedigree, robust processes, and stability backed by its broking and mutual fund arms. However, strategy performance has been weak in recent years amid significant churn in the core investment team. While recent results show signs of improvement, a sustained turnaround under the new team remains to be seen.
AMC's Pedigree
Motilal PMS has a strong investment pedigree in India, thanks to co-founder Ramdeo Agarwal's philosophy and processes.
AMC Team
Motilal has experienced significant turnover in its investment team in recent years. CIO Manish Sonthalia and several other team members have left. Prateek Agarwal has replaced Manish and is working to improve underperforming PMS strategies. It is too soon to assess the impact of Prateek's changes on Motilal's investment approach and performance.
Investment Philosophy
Motilal Oswal's QGLP investment philosophy focuses on identifying Quality businesses with strong fundamentals and management, possessing robust Growth potential in earnings and ROE. They prioritize the Longevity of these companies' competitive advantages, ensuring sustained performance. Finally, the "P" emphasizes buying these exceptional businesses at a Reasonable Price to ensure a margin of safety, aiming for long-term wealth creation through a disciplined approach. Motilal follows a long-term investment philosophy focused on high-quality companies meeting their QGLP criteria for over 20 years, resulting in consistent and attractive returns with minimal style drift.
Investment Philosophy
Motilal’s Focused Midcap strategy aims to invest in a concentrated portfolio (15-20 stocks) of their top mid-cap ideas (companies ranked 101-400 in market capitalisation). The focus is on emerging businesses that can benefit from a growth in earnings and valuation re-rating. Mid-cap focus is driven by the premise that most multi-baggers are found in mid and small-cap space. Motilal has a very clearly defined investment philosophy of long-term investing in high quality companies that meet their QGLP investment criteria. They have followed this strategy consistently for over 2 decades, with limited style drift. The QGLP Framework:- Quality of the Business and Quality of the Management: Stable businesses preferable consumer facing, with huge business opportunity and sustainable competitive advantages. Businesses run by competent management.
- Growth in Earnings: Driven by volume growth, price growth, mix change, operating and financial leverage.
- Longevity (of Quality and Growth): Dictated by long-term relevance of the business, extending competitive advantage period and sustenance of growth momentum.
- Price: Reasonable valuation, relative to quality and growth prospects with high margin of safety.
STRATEGY
- Growth: outlook of 20%+ at a portfolio level and portfolio level ROE at 15%+
- Reversion to mean: Invest in companies where valuations have corrected in last 2 years while they have retained their earnings profile
- Sector: little or no allocations to Commodities and global cyclicals
PORTFOLIO CONSTRUCTION
- Allocation: based on convictions on companies and does not necessarily dependent on the price
- Action-based on price movement: Mismatch of price and timelines should lead to action on folio on both sides i.e. selling and buying. Regular trimming of positions if price targets run ahead of timelines.
Trailing Performance
| 1yr | 3yr | 5yr | Since Inception | |
|---|---|---|---|---|
| Motilal AMC Mid to Mega | -9.8 | 23.8 | 22 | 23 |
| S&P BSE 500 | -6.6 | 14.7 | 19.2 | 16.8 |
| Alpha over Broad Mkt BM | -3.2 | 9.1 | 2.8 | 6.2 |
| Nifty Midcap 150 | -5.7 | 21.8 | 26.6 | |
| Alpha over Category BM | -4.1 | 2 | -4.6 |
Performance as of: 30-Sep-25 | Inception Date: 24-Dec-19 | Performance are post-fees, pre-taxes. Global funds denominated in USD or fund currency.
Investment team
Prateek Agrawal | 5-star rated FM
Executive Director | 31 yrs Experience | 3 yrs at current firm
Past Experience: BoI AXA MF (Head of Equity), BNP Paribas MF (Head of Equity), SBI Capital Markets (Head of Research)
Prateek is the CEO of Motilal Oswal AMC. He has over 3 decades of experience in fund management and research, having worked in senior positions in BoI AXA MF, BNP Paribas MF, SBI Capital Markets and ASK. In his last stint at ASK, he was spearheaded the growth of ASK PMS over this period.
Abhishek Anand | 3-star rated FM
Fund Manager | 22 yrs Experience | 2 yrs at current firm
Past Experience: Centrum Wealth Management, Centrum Broking, SBI Capital Markets, Dun & Bradstreet, CMIE
Abhishek Anand has 20+ years of experience with 8 years in institutional equity research covering sectors such as Telecom, Media, IT & Consumer. He has won the Starmine Top Analyst Award for 2011-12 and 2012-13 by Thomson Reuters. His previous assignments were with the institutional research division of SBI Capital Markets, Dun & Bradstreet, and CMIE.
Rakesh Tarway | 3-star rated FM
Fund Manager | 20 yrs Experience | 7 yrs at current firm
Past Experience: Reliance Securities (Head of Research), Motilal Securities (Head of Research), HSBC InvestDirect (Analyst)
Rakesh is a seasoned equity research professional, with a focus on identifying emerging businesses in the small & mid-cap sectors.
Vaibhav Agarwal | 1-star rated FM
Fund Manager | 14 yrs Experience | 4 yrs at current firm
Past Experience: Analyst bank loan Ratings(Crisil)
Vaibhav Agrwal is the founder of Teji Mandi, which is a platform aimed at helping retail investors in india navigate the volatility of the markets through affordable and quality advisory. He has managed a proprietary pms and has over a decade experience in stock picking and generating index-beating returns.
