Highlighting HUL’s long-term sustainability and growth prospects, he said, “These companies also have tremendous longevity. I don’t see HUL disappearing from the market after say, 10 years, 15 years or 20 years… This ice cream company is a 15% to 20% growth company and HUL shareholders will get one share for one share… From the fourth quarter onwards, things should look better and then HUL should start performing better from November onwards, only as per the guidelines of the management. So I would say that yes, I have a slightly overweight position at 4%, which was very recently purchased, and this is a good counter buy for me.”When asked about the intrinsic value of HUL’s demerged ice cream business, Thakkar estimated it at “Rs 60 to Rs 70 per share.”
Thakkar also shared his views on other FMCG companies and noted mixed performance in the sector. “Marico, we saw good outperformance, so we have made some gains there… In Dabur, business has definitely not been that good so far, but this time the winter is very intense, which bodes well for Dabur’s portfolio of chyawanprash… So I would say this is an interesting counterpoint, both FMCG and IT.”
On Tata Motors’ passenger vehicles (PV), Thakkar was more cautious. “JLR is a very complex business that always needs to be understood and therefore valued, plus it requires a lot of capital investment and a lot of R&D expenditure… I would stay away from it at least for a while until the prospects for JLR improve.” On Asian Paints, he remained optimistic about the sector’s recovery after a challenging period. “The big companies always find their way out… and now that the peak of Birla Opus disruption is behind us, I think paint as a business should do well. We obviously have Asian Paints at a much lower price and are also making profits, so we are not a buyer at this price, but I would say the worst of the industry seems to be clearly behind us.” Thakkar noted cautious optimism about the Adani Group companies. “We haven’t invested in it yet, but in Adani Enterprise we saw that there is going to be a good issue of 1800 worth Rs 25,000 crores and where the promoter owns 73% stake. So the promoter is going to put Rs 18,000 crore at Rs 1,800, which makes me feel good… I would like to buy it if the share price corrects a little bit, if it corrects.”
Thakkar also highlighted the opportunities in the entertainment and QSR sector. Speaking about PVR, he said: “Post-Covid, for the first time, there are many customers who are going into the cinema to at least experience the theater experience… So we have just bought a very small 1.5% weight in this company and we will wait and see… it is a forgotten stock and that is why we have bought a small weight.”
On quick service restaurants such as Jubilant FoodWorks, he added: “We haven’t bought it yet. We’re watching this very closely… This company also got very high valuations based on long-term results that a lot of other companies are getting now, but this is again an ignored area… I would watch this area closely and I would certainly look to buy some of these names at some point depending on price.”
Thakkar concluded that despite the recent market turbulence, select largecaps, PSU banks and undervalued FMCG and IT companies offer attractive opportunities for patient investors willing to take a contrarian approach.
#FMCG #largecaps #offer #market #volatility #Parag #Thakkar