Motilal Oswal Hockey Stick Micro Cap Portfolio

What Is Motilal Oswal Hockey Stick Micro Cap Portfolio?

Motilal Oswal Hockey Stick Micro Cap Portfolio is an equity Portfolio Management Service (PMS) launched by Motilal Oswal on 29 August 2024. It applies the Hockey-Stick Return framework to microcap companies and looks for businesses whose economic profit may be improving.

A hockey-stick pattern describes a stock that remains relatively flat for a period before experiencing a sharp and sustained price rise. The strategy studies economic profit and the possibility of companies moving up the Economic Profit Power Curve. It does not assume that such a rise will happen.

The portfolio is a discretionary equity PMS designed around a focused microcap investment approach. Its disclosed investment horizon is medium to long term. Investors exploring this strategy should account for the liquidity, volatility and drawdown risks associated with smaller listed companies.

It is different from the Motilal Oswal Microcap Multifactor Strategy, which uses a factor-based selection model, and the Hockey Stick Mini Cap Portfolio, which targets a separate company-size segment.

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

The table summarises the portfolio's key terms and the latest available AUM information.

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

Motilal Oswal's 28th Annual Wealth Creation Study describes a hockey-stick return as a sharp and sustained increase in a stock's price. The framework uses economic profit as one of the key measures for assessing companies that may have the potential to create wealth over time.

The portfolio's disclosure defines economic profit as:

Economic Profit = Net Worth × (Return on Equity - Cost of Equity)

A company generates positive economic profit when its return on equity (RoE) exceeds its cost of equity (CoE). If RoE falls below CoE, the business is not earning enough to cover the return expected on its equity capital.

The broader investment framework also considers four elements known as TEMP:

• Trends: Economic, industry and consumer changes that may create opportunities or challenges for a business.
• Endowment: Existing strengths such as management capability, brand, market position and operating resources.
• Moves: Strategic decisions, including capital allocation and business expansion, that can influence future economic profit.
• Price: The market valuation at which an investor buys the company's shares.

The underlying study is historical research, not a forecast of future stock performance. For the detailed explanation of the framework and its historical observations, read about hockey stick returns.

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

The strategy uses the Economic Profit Power Curve to group companies into five categories, known as quintiles. These groups represent different levels of economic profit.

The portfolio's disclosed approach focuses on companies in Quintiles 2 and 3 that may move towards higher quintiles. The objective is to identify businesses where the relationship between RoE and CoE, along with the company's net worth, indicates scope for an improvement in economic profit.

The framework is applied to the microcap universe defined by the portfolio. It looks beyond a company's current share price and considers the underlying economics of its business.

However, a company may not move to a higher quintile. Its profitability may weaken, its cost of equity may rise or its economic profit may decline. The framework is a method of evaluating and selecting stocks, not a mechanism for predicting returns.

The disclosure identifies the portfolio as a high-conviction focused strategy. It does not specify a current stock count, individual position limits or a fixed rebalancing schedule.

What Are Microcap Stocks, and Why Does Hockey Stick Micro Cap Portfolio Focus on Them?

Microcap companies are generally understood as businesses at the smaller end of the listed equity market. SEBI does not have a separate official microcap category. The Hockey Stick Micro Cap Portfolio uses its own market-cap classification.

SEBI's standard classification divides listed companies into three categories:

• Large caps: Companies ranked 1–100 by full market capitalisation.
• Mid caps: Companies ranked 101–250.
• Small caps: Companies ranked 251 onwards.

For this strategy, the portfolio disclosure specifies a mandate to invest in equity and equity-related instruments of companies ranked 1,500 to 2,000. It also retains the flexibility to invest across the wider market-cap spectrum.

The strategy applies its economic-profit framework to this smaller-company segment. Its high-conviction approach seeks to identify businesses that may improve their economic performance over time. The potential for business growth comes with meaningful risks, including thin research coverage, lower liquidity and greater price volatility.

Microcap vs Mini Cap vs Small Cap

Microcap and mini cap are not interchangeable terms. Investors comparing microcap PMS options should check the actual market-cap universe and stock-selection process rather than relying on product names alone.

Hockey Stick Micro Cap Portfolio Construction: Holdings and Concentration

The portfolio is described as a high-conviction focused portfolio. However, the latest available APMI profile does not provide a current stock count, position-wise allocation or sector breakdown.

EdgePnL displays AUM of ₹3 crore through August 2026, while APMI displays ₹0.00 crore. With this difference and no current holdings data, a reliable concentration analysis cannot be presented.

Investors should refer to the latest portfolio factsheet for stock-level exposure, sector allocation and portfolio changes. In microcap portfolio management, these details are particularly relevant because trading volumes and liquidity can vary significantly across holdings.

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

The portfolio uses the BSE 500 TRI as its benchmark. The index covers a much broader set of listed companies than the strategy's primary microcap universe, so benchmark comparisons should be read with this difference in mind.

The latest available EdgePnL return record covers data through August 2026. It reports a total return of 0.0% for FY27 year-to-date, 10.1% for FY26 and -42.5% for FY25. These are returns over the months covered in each period, not annualised figures. The FY27 figure is partial-year data.

APMI's period-wise performance feed does not currently display usable figures, and its profile shows since-inception performance as 0.0%. The strategy began on 29 August 2024, so its track record remains limited.

Past performance is not indicative of future performance. Refer to the live performance module for updated figures when available.

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

The Motilal Oswal Hockey Stick Micro Cap Portfolio minimum investment is ₹50 lakh. The portfolio manager's disclosure permits the initial corpus to consist of securities, funds or both, subject to applicable requirements.

APMI lists the fixed fee structure, variable fee structure and exit load as NA. The available profile therefore does not establish the applicable charges. NA should not be interpreted as confirmation that the portfolio has no fees.

PMS fee arrangements may include a fixed management fee, a performance-linked fee and other applicable expenses. The actual calculation and payment terms depend on the agreement signed by the client.

The PMS agreement is the final reference for management fees, exit conditions, expenses and other charges. Investors should also understand PMS taxation in India, since tax treatment depends on the transactions and applicable rules. A qualified tax professional can clarify the implications for an individual investor.

Hockey Stick Micro Cap vs Other Hockey Stick Portfolios and Microcap Multifactor

Motilal Oswal offers separate PMS strategies for different market-cap segments and investment approaches. The Hockey Stick portfolios share an economic-profit framework, while the Microcap Multifactor Strategy uses a factor-based model.

Hockey Stick Micro Cap vs Hockey Stick Mini Cap

The Micro Cap strategy targets companies ranked 1,500–2,000 by market capitalisation, while the Mini Cap strategy identifies companies ranked 1,000–1,500. Both use the Hockey-Stick Return framework and have the same minimum investment. Their stated market-cap segments are separate, even though both portfolios retain flexibility across the wider market.

Hockey Stick Micro Cap vs Hockey Stick Small Cap

The Hockey Stick Small Cap Portfolio applies the same broad economic-profit framework to a small-cap investment universe. Its inception date is 4 January 2024, earlier than the Micro Cap strategy. Both are discretionary equity PMS portfolios managed by Vaibhav Agrawal.

Hockey Stick Micro Cap vs Hockey Stick Multi Cap

The Hockey Stick Multi Cap Portfolio applies the Hockey-Stick Return framework across a multi-cap investment universe. The Micro Cap strategy has a more specific focus on companies ranked 1,500–2,000. The difference lies in the intended investment universe, not simply in the shared framework.

Hockey Stick Micro Cap vs Microcap Multifactor Strategy

The Motilal Oswal Microcap Multifactor Strategy also invests in microcap stocks, but follows a different selection process. Its disclosure describes a factor-based model that considers profitability, valuation and market momentum. It is a rules-based approach with no human intervention in determining portfolio entries and exits. The Hockey Stick strategy instead uses economic profit and the Power Curve as its documented selection framework.

Risks of Investing in Motilal Oswal Hockey Stick Micro Cap Portfolio

Microcap stocks can offer exposure to smaller businesses, but they also carry risks that investors should understand before committing capital.

Liquidity and impact cost

Microcap shares may have limited trading volumes. Selling a large holding can take time, and sizeable orders may move the market price. This can increase impact costs and affect the price at which transactions are executed.

Volatility and drawdowns

Smaller companies can experience sharp price movements due to business developments, changes in market sentiment or broader corrections. The portfolio may face substantial drawdowns during unfavourable market conditions.

Economic Profit Power Curve risk

The strategy seeks companies that may move towards higher quintiles on the Power Curve. A company may fail to improve its economic profit, remain in its current quintile or move lower. Its business performance may also weaken.

Assumption risk

Economic profit depends on net worth, RoE and CoE. Changes in these inputs can alter the assessment of a company's economic performance. Incorrect assumptions may lead to an unsuitable investment decision.

Valuation risk

Even a business with improving profitability can be a poor investment if its share price is too high. A fall in valuation multiples can reduce stock prices despite stable operating performance.

Governance and disclosure risk

Smaller or owner-driven companies may have limited public information and governance challenges. Weak disclosures or management integrity concerns can affect business value and investor returns.

Concentration risk

The strategy is described as a high-conviction focused portfolio. Concentrated exposure can increase the effect of adverse developments in individual companies or sectors.

Short track record and uncertain AUM

The strategy began in August 2024, so it has limited performance history. APMI displays AUM of ₹0.00 crore, while EdgePnL reports ₹3 crore through August 2026. This difference should be considered when assessing the available portfolio information.

Benchmark mismatch

The BSE 500 TRI covers a much wider universe than the portfolio's primary microcap segment. A comparison with the benchmark may not fully reflect the risks and market behaviour of the strategy's intended investment universe.

Read the disclosure document before investing.

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

The minimum investment is ₹50 lakh. The general onboarding process involves these steps:

1. Confirm availability: Check whether the portfolio is open for new subscriptions.
2. Check eligibility: Residents, HUFs, companies and NRIs may be eligible, subject to applicable PMS rules and portfolio manager requirements.
3. Complete KYC: Submit the required identity, address, PAN and other documentation.
4. Complete risk profiling: Provide the information required for the portfolio manager's investor assessment.
5. Review the documents: Read the disclosure document and sign the PMS agreement after understanding the terms.
6. Set up accounts: Complete the required demat and bank account arrangements.
7. Fund the portfolio: Transfer ₹50 lakh or more through eligible cash, securities or a combination, subject to the portfolio manager's requirements.

NRIs considering PMS for NRI investments should also review applicable FEMA, tax and repatriation requirements.

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

ALTPORT is an APMI-registered investment distributor (APRN00074) that provides access to information on PMS and other investment products.

Investors exploring Motilal Oswal Hockey Stick Micro Cap PMS can use the platform to understand its investment framework, product terms, available performance information and associated risks. ALTPORT also presents relevant product information, directs users to official documents and facilitates access.

Explore Motilal Oswal PMS strategies to review the available portfolios and compare their stated investment approaches.