MOTILAL OSWAL Value Strategy

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About Company

MOFSL was founded in 1987 with 2 employees as a sub-broking unit with their main focus of customer-first attitude, ethical and transparent business practices, and many more. Today Motilal is a diverse firm that is working on a range of financial products and services such as Private Wealth, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Home Finance, etc. Motilal has clients of retail customers, mutual funds, foreign institutional investors, financial institutions, corporate clients, etc. They have more than 44,00,000+ customers across the globe. They make every decision with solid research at present they have 25+ research analysts researching over 250 companies across 20 sectors.

Fund Snapshot

Year of Inception 2002
Number of Stocks 26
Investment Horizon Long Term
Fund Managers Manish Sonthalia

Unique Feature

 Investing using the buy-right, tsit-tight approach

Investment Objective

The strategy seeks to benefit from the long-term compounding effect of investments in good businesses run by great business managers to create superior wealth.

Investment Philosophy

By investing in shares from various industries, the strategy aims to outperform the market. MOTILAL OSWAL Value Strategy plans to invest in equities across the market capitalisation spectrum, focusing on identifying potential winners who will participate in successive stages of GDP growth.

Identifies emerging stocks or sectors that guarantee above-average growth and focuses on sectors and companies. The development of themes is emphasised. The “Buy and Hold” strategy. 

The strategy’s direction is to invest in equity and equity-related funds across large corporations’ entire market capitalisation spectrum. The strategy seeks to benefit from the long-term compounding effect of investments in good businesses run by great business managers to create superior wealth. 

Their portfolios are elevated conviction portfolios, with an ideal number of 25 to 30 stocks. We presume adequate diversification, but excessive diversification dilutes returns for our investors and increases market risk.

Concentrate on Return on Net Worth: Companies are likely to earn 20-25% on their net worth in the future.

  • The margin of safety: Buying a good business for a fraction of its true value.
  • Balance of growth and value:
    • The emphasis is on purchasing undervalued companies.
    • Investing in assets with stable earnings/cash flows at a reasonable price.
  • Long-term commitment View: “Money is made by investing for the long term,” in my opinion.
  • Bottom-Up Approach: Focus on individual companies and their management bandwidth to identify potential long-term wealth creators.
  • Concentrated Strategy Construct: There should be no more than 15 to 20 stocks.

Buy And Hold Strategy

  • The strategy results in low churn, lower costs, and higher returns.
  • A company is wisely chosen for investment after thoroughly examining its underlying hidden long-term potential.
  • Motilal Oswal strictly buys and holds investors. We believe that selecting the right business requires skill, as does holding onto these businesses to allow our investors to stand to gain from the entire growth phase.

Importance of The 'Buy Right: Sit Tight'

Real wealth is created by riding out most of a quality company’s growth curve rather than trading in and out in response to buy, sell, and hold recommendations. This philosophy lets investors and managers stay focused on their businesses rather than distracted by share price movements.

A strategy of purchasing high-quality stocks and holding them for long-term wealth creation results in significant cost savings for the end investor. Long-term wealth multiplication is only possible by sticking with the winners and abandoning the losers. 

While Buy Right is primarily the responsibility of the portfolio manager, Sit Tight necessitates the participation of both the portfolio manager and the investor. It requires greater accountability from the manager and greater involvement and understanding from the investor, resulting in better learning for the latter.

Capital Allocation

Allocated Category Allocation Percentage
Large Cap 66%
Mid Cap 16%
Small Cap 16%
Cash / Equivalent 2%

Top 5 Stock Holdings

Name of The Stock Allocation Percentage
ICICI Bank Ltd. 9%
HDFC Bank Ltd. 7.6%
Larsen & Toubro Ltd. 6.3%
Max Financial Services Ltd. 5.6%
SBI Cards And Payment Services Ltd. 5.5%

About Fund Managers

Mr. Manish Sonthalia-Director & CIO,PMS

manish sonthalia
Mr. Manish Sonthalia has a Bachelor of Commerce (Hons) degree, as well as ICWAI, CS, MBA Finance, and FCA certifications.
In 2010, he co-authored the paper A Growing Consumer Class on Indian Markets, which was published by the World Economic Forum.

 

Raamdeo Agrawal-Chairman, Motilal Oswal Financial Services Limited (MOFSL)

Raamdeo Agrawal Portfolio - Motilal Oswal Financial Services

Raamdeo Agrawal is the chairman and co-founder of Motilal Oswal Financial Services Ltd. He is known as a renowned value investor who believes in the power of compounding. In 2019, he was among the list of billionaires according to Forbes, with a net worth of $1 billion in 2018.Raamdeo was born and brought up in the village of Chattisgarh. He is a man with dignity and discipline. Later he moved to Mumbai to study to become a Chartered Accountant. He wrote the book Corporate Numbers Games with Ram K P. Mriparia. Mr. Raamdeo also authored The Art Of Wealth Creation.He maintained a consistent track record of the highest integrity in tax payments for five years from FY95-FY99 and thus received Rashtriya Samman Patra by the Central Board of Direct Taxes for the same. One would be glad to know that Raamdeo Agrawal considers Warren Buffett a mentor, and his investment strategy is exceptionally inspired by him.

Portfolio as of 31-Dec-2017

Scrip Name Weightage (%)
HDFC Bank Ltd. 10.61
Bharat Petroleum Corporation Ltd. 8.69
Kotak Mahindra Bank Ltd. 7.44
Asian Paints Ltd. 6.79
AU Small Finance Bank Ltd. 6.59
Eicher Motors Ltd. 6.52
Bharat Forge Ltd. 6.38
Sun Pharmaceuticals Ltd. 5.57
SLarsen & Toubro Ltd. 5.21

Top 5 Allocated Sectors

Sector Name Allocation Percentage
Banks 22.5%
Finance 16.7%
IT – Software 9.6%
Construction 8.3%
Insurance 8.1%

Fund Analysis

PE NA
Standard Deviation 22.7%
Beta 1.0%
Alpha NA
Average Historical Churning NA

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Disclaimer: Investing Involves Risk. This document is for information purposes only and should not be viewed as a legal offering document or solicitation. Offers to invest in this fund are made only by the Discretionary Portfolio Management Services Agreement. Past performance does not guarantee future results and there is no assurance that the managed accounts will necessarily achieve their objectives. We do not guarantee any returns in the hand of investors not we take any sort of accountability for the performance of the scheme. The above-mentioned data is collected from the respected Fund house please verify the same at SEBI website.