Discussing Hindustan Unilever (HUL), Thakkar noted the stock’s prolonged underperformance but expressed confidence in its future. “We have recently bought 4% weight in HUL when it started falling after the results and I will be very constructive going into fourth quarter because the management has already indicated… from November this GST-led disruption on the ground will stop and things will start turning… I feel that rural India should do well and FMCG pack will come back,” he said.
He emphasized HUL’s long-term sustainability and growth prospects: “These companies have a huge longevity also. I do not see HUL vanishing from the market after say 10 years, 15 years, or 20 years… This ice-cream business is a 15% to 20% growth business and HUL shareholders will get one share for one share… from Q4 things should look up and then HUL should start outperforming from November as per management guidance only. So, I would say that yes, I have a slightly overweight position which is 4%, which is very recently bought, and this is a good contra 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 views on other FMCG companies, noting a mixed performance across the sector. “Marico, we saw a good outperformance, so we booked some profits there… Dabur definitely things were not so well up till now, but this time winter is predictive to be very intensive which augurs well for Dabur’s portfolio of chyawanprash… So, I would say that this is an interesting contra bet, FMCG and IT both.”
On Tata Motors Passenger Vehicles (PV), Thakkar was more cautious. “JLR is a very-very complex business always to understand and so to value, plus it requires a lot of capex and a lot of R&D expenditure… I would stay away from it at least for some time till JLR outlook improves.” Turning to Asian Paints, he remained optimistic about the sector recovering after a challenging period. “The great companies always find their ways out… and now with the peak of the disruption from Birla Opus is behind, I think that paints as a business should do well. We have, of course, Asian Paints at a much lower price and then book profits also, so we are not a buyer at this price, but I would say that the worst in the sector seems to be behind clearly.” On Adani Group companies, Thakkar noted cautious optimism. “We have not bought into it yet, but in Adani Enterprise we saw that there is a right issue coming at 1800 worth 25,000 crores and where promoter owns 73% stake. So, promoter is going to put 18,000 crore at Rs 1,800 which gives me a good comfort… I would like to buy it when stock price corrects a bit, if it corrects.”
Thakkar also highlighted opportunities in the entertainment and QSR sectors. Speaking on PVR, he said, “After covid, the first time there are many customers who are entering into theatres at least to experience the theatre experience… So, we have just bought a very small 1.5% weight in this company and we will wait and watch… it is a forgotten stock and that is why we have bought a small weight.”
On quick-service restaurants like Jubilant FoodWorks, he added, “We have not yet bought it. We are watching this very closely… This company also used to get very high valuations based on long-term things which many other companies are getting right now, but this is again an ignored space… I would be a close watcher on this space and I would definitely look to buy some of these names at some point depending on price.”
Thakkar concluded that, despite recent market turbulence, select largecaps, PSU banks, and undervalued FMCG and IT companies present compelling opportunities for patient investors willing to take a contrarian approach.
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