Why is Milotic not ranked :( I had assumed that it was at least in D-Rank. It didn't even make the cut for E.
In any case,
Milotic -> C- or C
This is one of those cute forgotten treasures. Milotic has a very clear niche, and that is as a Mirror Coat user (marvel scale is pretty nice too).
Milotic @ Leftovers
Ability: Marvel Scale
EVs: 248 HP / 252 Def / 8 SpD
Bold Nature
- Scald
- Mirror Coat
- Recover
- Ice Beam / Dragon Tail / Toxic / Haze
Even without Spdef investment, it is crazy bulky on both sides. For reference:
252 SpA Life Orb Thundurus Thunderbolt vs. 248 HP / 8 SpD Milotic: 307-361 (78.1 - 91.8%) -- guaranteed 2HKO after Leftovers recovery
252 SpA Serperior Leaf Storm vs. 248 HP / 8 SpD Milotic: 242-288 (61.5 - 73.2%) -- guaranteed 2HKO after Leftovers recovery
+2 252 Atk Sharp Beak Talonflame Brave Bird vs. 248 HP / 252+ Def Milotic: 286-337 (72.7 - 85.7%) -- guaranteed 2HKO after Leftovers recovery
252+ Atk Teravolt Kyurem-B Fusion Bolt vs. 248 HP / 252+ Def Milotic: 246-290 (62.5 - 73.7%) -- guaranteed 2HKO after Leftovers recovery
The important thing to realize is that there are very few physical moves that are supereffective against milotic in ou. Breloom, Kyurem, and Victini are the only ones. This frequently puts the opponent in a check-mate sort of position where, even if they know you carry mirror coat, they have no real way to break you without a special move (and losing a mon in the process). This is especially true if you run dragon tail to prevent setup at the same time (though clefable makes a lovely partner if you choose to forego it. This also helps make up for milotic's lack of a fighting resistance in comparison to slowbro). Further discouraging physical moves is the obvious scald and, more uniquely, Marvel Scale. When Milotic is statused, her defense is boosted to almost that of a Mega Slowbro without a +def nature.
For reference:
+2 252 Atk Sharp Beak Talonflame Brave Bird vs. 248 HP / 252+ Def Marvel Scale Milotic: 192-226 (48.8 - 57.5%) -- guaranteed 2HKO after Leftovers recovery and burn damage
0 SpA Milotic Scald vs. 120 HP / 0 SpD Talonflame: 236-278 (72.1 - 85%) -- guaranteed 2HKO
252 Atk Technician Breloom Bullet Seed (3 hits) vs. 248 HP / 252+ Def Marvel Scale Milotic: 204-252 (51.9 - 64.1%) -- guaranteed 2HKO after Leftovers recovery and burn damage
0 SpA Milotic Ice Beam vs. 0 HP / 0 SpD Breloom: 196-232 (75 - 88.8%) -- guaranteed 2HKO
252+ Atk Hoopa-U Hyperspace Fury vs. 248 HP / 252+ Def Marvel Scale Milotic: 118-139 (30 - 35.3%) -- guaranteed 3HKO after Leftovers recovery and burn damage
Aside from that, Milotic functions as a typical bulky water with above-average special attack. Its competition in this role is Alomomola, but Milotic is bulkier and much harder to set up on (especially with dragon tail). Alomomola can't damage anything, and it's a liability in this meta. If Alomomola is C+, then milotic certainly deserves a place in the C's. Also,
Alomomola C+ -> C- or D for reasons listed. Not to mention that Clefable and Chansey are everywhere, meaning that wish support isn't as valuable of a niche as it was before.
Here is an obligatory replay that I pulled real quick. You can see both the checkmate situation that I described as well as how lovely marvel scale can be (in fact, both of these caused my opponent to forfeit). He has three electric types, but since none of them even come close to KO-ing, there is no way to come out without losing a mon or more. Something like Rotom-W isn't free to sit in milotic like it can against, say, slowbro, because milotic will KO a mon on the volt switch, statusing it only boosts it's defense, and every passed turn is an opportunity to scald burn.
http://replay.pokemonshowdown.com/ou-256117302