Good time to relook at HUL post GSK Consumer deal, says Raamdeo Agrawal

Raamdeo Agrawal, co-founder of Motilal Oswal Financial Services, spoke to CNBC-TV18 about the current trends in the equity market and outlook.

“I think the big event in the last three-four weeks is correction in the oil prices. That has been huge and it is a positive surprise and that gave a well-liquidated market, the midcap and the smallcap kind of slaughtered, after that there was a meaningful correction in the largecap also. So it was a well-liquidated market and somehow these technical guys get it right, at 10,000 it bounced back. Oil varies very significantly. If it sticks here, things will start changing,” Agrawal said on Tuesday.

Talking about how one can structure their stock portfolios, he said, “Portfolio is largely built in the sense that you are living with the portfolio whether it is correction or a rise, you are with the portfolio and then whatever incremental money is coming in, you can buy it today or you can postpone it for some time. That is the only option you have. So it is not a complete reconstruction and you are continuously looking for ideas. In corrected market, you get few more ideas to look at and you are looking for one-two ideas,” he added.

With regards to the worries surrounding individual companies such as IL&FS, Agrawal said, “No business happens in a straight line, there will be hiccups whether external or internal. It is good if it is external because it will correct itself because somewhere it is also internal, you create your own chaos and that takes a lot more time to correct but here economy has a full momentum and underlying product demand is very good. I think the trouble has started with IL&FS default and that mess is still on. So I think it will take some time for the broad markets to pick up but individual companies which are very strong, they will become a little cautious."

Talking about Hindustan Unilever's acquisition of GlaxoSmithKline's Horlicks nutrition business, he said the deal offers a good opportunity to revisit HUL. "Good time to relook at HUL post GSK Consumer deal," said Agrawal.