Well-placed to take advantage of future FMCG Growth - HLL reach out 80% of 207 million households in the country through various brands. It has a very well-defined product portfolio spread across many product categories.
Penetration levels for some major categories like skin-cream (22%), shampoo (38%), toothpaste (48%) and processed foods, continue to remain low offerings but great growth opportunities products.

Threats

ITC has reduced its dependence on the cigarettes business - Contribution of the core business in revenues has come down from 87% in FY99 to 70% in FY05. Over a period of five years, ITC has extended its presence into areas like foods, retailing, hotels, greetings, agri, paper, etc. These are businesses that can give it growth impetus in the long run. With ITC gaining momentum in each of these businesses, it is turning into a consumer monolith, and hence, the greatest threat to HLL's Business.

SSKI India has gone on to say, "We maintain Out performer on ITC with a price target of Rs. 2200, while our Under performer call on HLL remains unaltered (price target of Rs. 160)."

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* Contributed by: -
Manik Kinra,
Batch 2006-07,
Great Lakes Institute of Management, Chennai.