We remain neutral on HUL and underweight on ITC: Dr Tirthankar Patnaik, Religare Capital

In a chat with ET Now, Dr Tirthankar Patnaik, Director, Strategist-Institutional Research, Religare Capital Markets Limited, shares his views on ITC and HUL.

ET Now: What is the call on ITC and Unilever?

Dr Tirthankar Patnaik: In case of HUL, we do not see much event triggers going forward and the buyback announcement was the last big event that we saw.

So, for Unilever the core call over the next year is how much input cost basically comes down and how much are they willing to. Today, the market is fairly happy with 5% volume growth.

But if input cost actually comes down further, then one could see volume growth surprise on the positive side to about 7% also. So, we would remain neutral on HUL at Rs 580-590 levels.

In the model portfolio, we do not have HUL and we have Dabur and ITC instead. ITC has basically benefited from being an index pick and it is a hugely liquid stock. We do not see much of an upside at this point due to its valuations, but we will not get out of it either. So, currently we are underweight on ITC at about 5.5%-6% in our model portfolio.