Hindustan Lever is well prepared up for the Y2K 'bug'
Hindustan Lever Limited (HLL) has for a long time been a favourite of the fund managers and analysts alike mainly due to the high quality of its management. Whether it is over reaction or just a hunch, the HLL management has geared up its infrastructure to minimise the damage that would otherwise have (may) occurred due to the millennium bug.
Hindustan Lever Limited (HLL) is the largest consumer products company in India. HLL's business portfolio comprises soaps, detergents, personal products, food products and frozen desserts.
HLL has ensured that its plants and stockists have adequate supplies to be able to service customers even if there were to be an adverse fallout due to the millennium bug. Its plants are stocked with supplies including diesel (in case the power plants shut down), while its stockists have been stocked with goods enough to service customers for sometime. In case, the telephones were to stop working, the company has already issued satellite phones to key personnel so that there is no significant fallout on the operations of the company.
Some people would say that the company is definitely overdoing it in view of the general acceptance that all has been taken care of. But then prevention is better than cure. Infact, HLL has been a pioneer in dealing with the fallout of the millennium bug. Now that the company has taken care of internal systems, it has, by taking these precautions, prepared itself for any unforeseen consequences that may result due to the ill preparedness of its suppliers.
HLL is often termed as one of India's best-managed companies. It is surely not difficult to see the rationale behind this.
The stock has been rated as a 'BUY' by analysts because of its high management quality, and strong brands. Moreover, the company's successful marketing thrust into the rural markets, which has given it access to a largely untapped market of approximately 650 mn people, has also lent support to this rating.
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