The Motilal Oswal Midcap Fund has released its portfolio update for March 2025, providing valuable insight into how the fund manager is navigating the current market environment. The fund continues to strike a balance between building positions in high-conviction ideas, trimming exposure in underperforming sectors, and steadily increasing its cash reserves as a buffer against volatility.
One of the most notable developments this month is the addition of Hitachi Energy India Limited to the portfolio. With a fresh investment of 3.5 lakh shares, this stock enters with a 100% increase over February, when it had no allocation. It now accounts for 1.7% of the fund’s assets under management (AUM), signaling a strong bet on India's growing energy infrastructure and the shift toward electrification. Alongside this, the fund has significantly increased its holdings in Polycab India Limited, up 27.14%, making up 4.4% of AUM. Polycab’s strong fundamentals and leadership in the wires and cables segment likely influenced this decision.
Another big gainer is Trent Limited, where holdings rose 18.65%. Trent, a leader in the retail space, has been showing strong growth, making it an attractive bet in the consumer sector. The fund also added aggressively to Mazagon Dock Shipbuilders Limited (up 17.48%) and Prestige Estates Projects Limited (up 14.72%), showing its optimism about the defense manufacturing and real estate segments. Similarly, Kalyan Jewellers and Tube Investments of India saw increases of over 14% and 10%, respectively.
On the other hand, Coforge Limited has retained its spot as the largest holding in the fund, with 32.5 lakh shares representing a significant 10.13% of the total AUM. The fund’s consistent position in Coforge suggests continued confidence in the midcap IT company’s growth trajectory and digital focus. Other key technology bets like KPIT Technologies and Persistent Systems remain in the top holdings with minor increases, reinforcing the fund’s belief in the long-term potential of the digital and IT services sector.
The portfolio also reflects a steady stance in other sectors. The fund did not change its exposure to companies such as Bharti Hexacom, Max Healthcare, Mankind Pharma, The Indian Hotels Company, and KEI Industries. These represent a mix of telecom, healthcare, hospitality, and electricals — sectors that offer either defensive strength or consistent long-term growth potential. This holding pattern may signal that the fund is taking a wait-and-watch approach with these companies, maintaining core exposure without chasing short-term momentum.
However, the portfolio wasn’t without exits and reductions. The most prominent move was the complete exit from Oracle Financial Services Software, where the fund cut its 5.26 lakh share holding to zero — a 100% divestment. While the reasons aren't disclosed, it likely reflects a reallocation of capital to higher conviction bets or concerns around growth prospects. There were also sizeable reductions in several other companies: Indraprastha Gas Limited was trimmed by 43.88%, Dixon Technologies by 35.13%, Voltas by 19.72%, and Balkrishna Industries by 18.49%. Supreme Industries also saw a 15.28% drop in holdings. These moves suggest the fund is either booking profits or reacting to emerging headwinds in industrials, auto ancillaries, and consumer durables.
Even One 97 Communications (Paytm) saw a reduction of 5.19%, possibly due to concerns related to regulatory scrutiny and profitability challenges in the fintech space. All these changes indicate a more cautious and selective approach to stock selection going forward.
Beyond stock movements, a major takeaway from the March update is the fund’s rising liquidity position. The cash holdings have been consistently increasing — from 24.38% in January, to 28.32% in February, and now to 32.88% in March. This signals a clear defensive tilt. In addition to cash, the fund has allocated 7.43% of its equity portfolio to arbitrage positions, which offer low-risk, short-term gains — further underlining its cautious approach in today’s uncertain market conditions.
In conclusion, the Motilal Oswal Midcap Fund’s March 2025 portfolio reflects a well-thought-out and dynamic investment strategy. The fund is selectively increasing exposure in high-potential sectors like power, retail, and defense, while maintaining conviction in core IT and healthcare holdings. At the same time, it is carefully reducing or exiting positions that no longer fit its risk-reward profile. Most importantly, the rising cash and arbitrage component shows the fund is preparing itself for future opportunities — a signal of prudence in uncertain times. Investors can take comfort in the fund’s disciplined approach to capital allocation, which blends growth ambition with risk management.
