HUL has defied market logic of being the most expensive stock: Avinnash Gorakssakar

In a chat with ET Now, Avinnash Gorakssakar, Head of Research, Miintdirect.com, shares his views on HUL and the market.

ET Now: Why is HUL trading at 750 plus and I am sure you will agree with the popular perception that HUL is expensive?

Avinnash Gorakssakar: Hindustan Lever earlier was also expensive and having moved up, it has become even more expensive. But the point to drive is that Lever is always considered to a be a safe defensive bet in volatile markets. People move to defensive categories, either HUL or ITC, when the market cracks or there is a steep amount of correction.

More importantly, Lever has always been in the news considering that possibly another buyback could be on the cards. So these things apart, the fact of the matter is that October could be a more volatile month. We have always seen October to be not a good month for the markets. So clearly, defensives are gathering steam.

You could see possibly some other defensive names also getting accumulated from the pharmas or maybe from the IT pack. So clearly, the rate sensitive and the cyclical pack could possibly take a pause. Lever stands out in that category and has defied market logic of being the most expensive stock.

ET Now: Your top three ideas at this point?

Avinnash Gorakssakar: Clearly, we have been very positive on the textile space. We have been telling our clients to actually accumulate these stocks on every decline because we feel that the core earnings are going to grow strongly and the balance sheets are pretty clean.

For a value investor, it clearly remains that these kind of ideas could throw up 25-30 per cent comfortably over the next 12 months. So clearly from a value pick strategy, both these stocks look attractive.