Motilal Oswal Hockey Stick Small Cap Portfolio

What Is Motilal Oswal Hockey Stick Small Cap Portfolio?

Motilal Oswal Hockey Stick Small Cap Portfolio is a discretionary equity PMS launched in January 2024. It applies the Hockey-Stick Return framework to small cap companies and seeks to benefit from the long-term compounding potential of businesses whose economic profit may improve.

A hockey-stick pattern describes a relatively flat period followed by a sharp and sustained rise in a stock's price. The strategy looks for business characteristics that may support such a change. It does not mean that every selected company will experience this pattern or deliver similar returns.

The portfolio is intended for eligible investors who understand the volatility and liquidity risks associated with small cap stocks and can take a long-term investment view. Its approach differs from Small Cap Multifactor Strategy: Hockey Stick relies on fundamental economic-profit research, whereas Multifactor uses a rules-based model to score stocks on selected investment factors.

Motilal Oswal Hockey Stick Small Cap Portfolio: Fund Details and Key Terms

Here are the key details of Motilal Oswal Hockey Stick Small Cap PMS, including its benchmark, inception date, minimum investment and available portfolio information.

The AUM figures differ across the available portfolio displays. The EdgePnL profile shows ₹9 crore, while the APMI page displays ₹0.00 crore. The APMI fee and exit-load entries are marked NA, which does not mean that the charges are zero. The applicable PMS agreement contains the investor-specific terms.

What Is the Hockey-Stick Return Framework in Hockey Stick Small Cap Portfolio?

The Hockey-Stick Return strategy is based on the relationship between a company's economic profit and its stock price. Motilal Oswal's 28th Annual Wealth Creation Study, published in December 2023, described hockey-stick returns as a sharp and sustained rise in a stock's price.

The framework distinguishes economic profit from accounting profit. Accounting profit reflects reported earnings, while economic profit also accounts for the cost of the equity capital used by the business.

Economic Profit = Accounting Profit − Equity Charge

Equity Charge = Net Worth × Cost of Equity

The study used a 10% cost of equity for its analysis. It also outlined four considerations under the TEMP framework:

• Trends: Changes in the economy, industry, technology and consumer behaviour that can create opportunities or challenges.
• Endowment: A company's existing strengths, including management quality, brand, market share, production capacity, distribution and competitive position.
• Moves: Strategic actions such as acquisitions, capital expenditure, productivity improvements and better resource allocation.
• Price: The valuation at which an investor buys the stock. Even a strong business needs to be assessed against the price paid.

The study examined wealth creation during 2018–2023 and found that mid and small cap companies were favourably represented among businesses associated with hockey-stick returns. These are historical research observations, not expected returns from this PMS.

For a broader explanation of the framework, read about hockey stick returns.

How Does Hockey Stick Small Cap Portfolio Select Stocks Using the Economic Profit Power Curve?

Hockey Stick Small Cap Portfolio uses the Economic Profit Power Curve to assess companies across five groups, known as quintiles. It seeks small cap businesses that may move towards stronger economic-profit positions.

The first quintile represents companies with the strongest economic-profit position, while the fifth represents the weakest. Movement towards the higher quintiles can indicate an improvement in a company's ability to generate returns above its cost of equity.

A central measure is the relationship between Return on Equity (RoE) and Cost of Equity (CoE):

• RoE above CoE: The company generates returns above its cost of equity and creates positive economic profit.
• RoE equal to CoE: The company broadly earns its cost of equity.
• RoE below CoE: The company does not generate enough returns to cover its equity charge.

The strategy applies this framework within the small cap universe. It considers whether a company's Trends, Endowment and Moves could support better economic profit over time. It also considers Price, since an attractive business can still be an expensive investment.

The 28th Wealth Creation Study observed that companies reaching the first and second quintiles were associated with significant market-beating performance during its historical analysis. This does not mean that every company moving up the Power Curve will generate similar stock returns.

The current number of holdings, individual stock weights and portfolio rebalancing frequency are not established in the available portfolio details.

Hockey Stick vs Multifactor: How Is This Different from Small Cap Multifactor Investing?

Both strategies invest in small cap stocks, but their stock-selection processes differ. Hockey Stick uses fundamental economic-profit research, while Small Cap Multifactor follows a rules-based factor model.

Hockey Stick is a fundamental small cap PMS approach. Its central question is whether a company's business strengths and strategic actions can improve economic profit. Investors should understand that the outcome depends on business execution, valuation and the time taken for the investment thesis to develop.

Multifactor uses measurable investment factors to identify companies with profitable operations, reasonable valuations and favourable market momentum. The Small Cap Multifactor Strategy's stated approach is based on factor investing rather than the Hockey-Stick Return framework.

Neither method is automatically better or safer. The difference is in how each strategy identifies and evaluates potential investments.

Explore the Motilal Oswal Small Cap Multifactor Strategy to understand the alternative approach to small cap PMS.

Why Does Hockey Stick Small Cap Portfolio Focus on Small Cap Stocks?

Small cap companies are ranked 251 onwards by full market capitalisation under SEBI's classification. The categories are:

• Large cap: Companies ranked 1–100.
• Mid cap: Companies ranked 101–250.
• Small cap: Companies ranked 251 onwards.

Small cap businesses may have more room to expand their operations, market share or profitability than established larger companies. This makes the segment relevant to an economic-profit framework that looks for changes in business performance and capital efficiency.

The 28th Annual Wealth Creation Study found that mid and small caps were favourably placed for hockey-stick returns during its 2018–2023 research period. However, the same segment comes with meaningful trade-offs.

Small cap stocks generally have higher volatility, lower liquidity and less research coverage than large cap stocks. Their prices may react sharply to earnings changes, funding conditions, management developments and market sentiment. A small cap investment strategy therefore requires investors to account for the possibility of substantial drawdowns.

Hockey Stick Small Cap Portfolio Construction: Holdings and Concentration

The current number of stocks, individual position sizes and sector allocation of Hockey Stick Small Cap Portfolio are not established in the available PMS disclosures. These details should not be inferred from Motilal Oswal Small Cap Fund, which is a separate mutual fund scheme.

For comparison, the Motilal Oswal Small Cap Fund held 58 stocks as of 30 June 2026. Its top 10 holdings accounted for 33.21% of the portfolio, the top five represented 19.67%, and the top three accounted for 12.58%.

Its market-cap allocation was 85.99% in small cap stocks, 7.88% in mid caps and 1.37% in large caps. The remaining allocation included other categories. These figures belong to the mutual fund and are not the holdings or allocation of the Hockey Stick PMS.

Investors should refer to the PMS factsheet and portfolio disclosures for the strategy's actual holdings and concentration.

Motilal Oswal Hockey Stick Small Cap Returns and Performance vs BSE 500 TRI

The Motilal Oswal Hockey Stick Small Cap benchmark is BSE 500 TRI. It provides a broad-market reference for assessing performance, although its universe is wider than the small cap segment targeted by the strategy.

The portfolio began on 4 January 2024, so its live performance history is relatively short. The APMI performance feed does not currently provide usable return figures and displays zero values. Accordingly, no return figures are presented here.

Performance should be assessed alongside the benchmark, investment costs, portfolio risks and the period covered by the data. Past performance is not indicative of future performance.

Motilal Oswal Hockey Stick Small Cap Minimum Investment, Fees and Exit Load

The Motilal Oswal Hockey Stick Small Cap minimum investment is ₹50 lakh. Investors may meet this amount through cash, securities or a combination of both, subject to the portfolio manager's applicable terms.

The APMI listing marks fixed fees, variable fees and exit load as NA. These entries do not establish that the portfolio has no charges.

PMS fee structures may include a fixed management fee, a performance-linked fee or a combination of the two. The actual cost can depend on the fee calculation method, hurdle rate, high-water mark, billing frequency and exit conditions.

The PMS agreement and disclosure document contain the applicable charges and terms. Investors should read these documents before onboarding.

Hockey Stick Small Cap vs Other Motilal Oswal Hockey Stick Portfolios

Motilal Oswal's Hockey Stick range includes strategies for different market-cap segments. The economic-profit framework is the common thread, while the investment universe changes.

Hockey Stick Small Cap vs Hockey Stick Micro Cap

The Motilal Oswal Hockey Stick Micro Cap Portfolio applies the same broad framework to a smaller-company universe. Micro cap companies can have different liquidity, volatility and business risks from small cap businesses.

Hockey Stick Small Cap vs Hockey Stick Mini Cap

The Motilal Oswal Hockey Stick Mini Cap Portfolio focuses on its defined mini cap investment universe. The strategy retains the economic-profit lens, but the companies considered differ from those in the small cap portfolio.

Hockey Stick Small Cap vs Hockey Stick Multi Cap

The Motilal Oswal Hockey Stick Multi Cap Portfolio has a broader market-cap universe and can consider companies across different market segments. The small cap portfolio, in contrast, concentrates on its designated small cap universe.

These portfolios differ in market-cap exposure and potential risk characteristics. The common framework does not make their holdings, performance or risk levels interchangeable.

Risks of Investing in Motilal Oswal Hockey Stick Small Cap Portfolio

Small cap PMS investments can experience sharp price movements and liquidity constraints. Investors should understand the following risks before considering the portfolio.

Small Cap Volatility and Drawdowns

Small cap stocks can fall sharply during market corrections, weak earnings cycles or changes in investor sentiment. Portfolio drawdowns may be substantial and recovery can take time.

Liquidity Risk

Smaller companies may have limited trading volumes. Selling a large position during stressed markets can be difficult and may affect the price received.

Framework Risk

A company may not move up the Economic Profit Power Curve. Its business performance may remain weak, or the expected improvement in economic profit may not materialise.

Assumption Risk

Estimates of future earnings, RoE, CoE, industry trends and management execution may prove incorrect. A change in these assumptions can affect the investment thesis.

Valuation Risk

A company with improving fundamentals can still be overpriced. If its valuation multiple contracts, the stock price may decline even when the business continues to grow.

Business Risk

Competition, regulatory changes, debt, governance concerns and execution problems can affect smaller businesses disproportionately.

Concentration Risk

The current stock-wise and sector-wise exposure of this PMS is not established here. Investors should examine the latest portfolio disclosure to understand concentration in individual companies and sectors.

Manager Risk

The strategy depends on the portfolio manager's research, interpretation of economic profit and portfolio decisions. Changes in investment judgement or execution can affect outcomes.

Benchmark Mismatch

BSE 500 TRI covers a broader market universe than the small cap segment. Differences in market-cap exposure can influence relative performance.

AUM and Data Risk

The AUM displayed on available platforms is inconsistent, and the current performance feed does not provide usable return figures. Investors should consider the reporting date and methodology attached to portfolio data.

Read the disclosure document to understand the complete investment mandate, operating terms and associated risks.

How to Invest in Motilal Oswal Hockey Stick Small Cap Portfolio?

Investors considering Motilal Oswal Hockey Stick Small Cap PMS can follow these broad onboarding steps:

1. Confirm portfolio availability: Check whether the strategy is open for fresh investments.
2. Check eligibility: Resident individuals, HUFs, companies and NRIs may be eligible, subject to applicable PMS regulations and documentation.
3. Complete KYC: Submit the required identity, address, PAN and financial documents.
4. Complete risk profiling: Review the investment horizon, liquidity requirements and ability to bear equity-market losses.
5. Review and sign the documents: Read the PMS agreement and disclosure document, including the investment mandate, fee structure and exit terms.
6. Complete account setup: Arrange the required demat and bank account formalities.
7. Fund the portfolio: Meet the minimum investment requirement of ₹50 lakh through cash, securities or both, subject to acceptance by the portfolio manager.

NRIs should also consider the applicable investment route and documentation requirements. Read more about PMS for NRI investors.

How Can ALTPORT Help You Explore Motilal Oswal Hockey Stick Small Cap Portfolio?

ALTPORT is an APMI-registered investment distributor (APRN00074). It provides product information to investors exploring PMS and other investment categories.

For Motilal Oswal Hockey Stick Small Cap Portfolio, ALTPORT presents information about the economic-profit framework, benchmark, investment terms, available performance data and associated risks. The platform also directs investors to relevant product documents and facilitates access to investment opportunities.

Explore Motilal Oswal PMS strategies to view other portfolios offered by the portfolio manager.