UBS India positive on HUL

Gautam Chhaochharia, Head of Mid-Cap Research, UBS India is positive on Hindustan Unilever (HUL).

Chhaochharia told CNBC-TV18, "We have been positive on HUL recently and we maintain that stance. We are reading Unilever’s open offer quite positively. There are a number of things there. One, it indicates that they clearly remain much more positive on the growth opportunity here versus what possibly we are looking at, because clearly HUL’s PE multiple compared to Unilever’s PE multiple is much higher. So clearly they are deploying capital in this business with expectations that growth will be much higher than what we are looking at."
He further added, "Secondly, if you look at their brand portfolio globally etc. as per our analyst there is still a lot of way to go for them to keep introducing new brands, so clearly it could be a way to position the company to tap opportunities in the consumer space. So they are apparently much more positive on the Indian consumer from the medium-term perspective and therefore we still remain positive and I think the PE multiples will sustain. The stock is likely to have a floor around current levels and upside will depend on the way we see visibility on new brands being introduced."