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HUL-Kwality Walls Demerger: Kwality Walls will enter the market on 16 February, will become India’s first pure-play listed ice cream company.
The listing marks the formal completion of HUL’s first major portfolio break-up in years. The demerger of the ice cream vertical came into effect from December 1 last year and the record date to decide the eligible shareholders was set for December 5. Under the approved scheme, investors holding HUL shares on December 5 were allotted one share of Kwality Walls for every HUL share held. Now after getting the green signal from the exchange, these shares will be traded from next week.
Why is this listing important?
Kwality Walls is now going to become India’s first pure-play listed ice cream company. HUL’s strategy is clearly to unlock value by separating a capital-intensive, seasonal and operationally differentiated business from the core FMCG portfolio.
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The ice cream business includes popular brands like Cornetto, Magnum, Feast and Creamy Delight. The business runs on one of the largest cold-chain networks in the country, with over 2 lakh cabinets installed.
Global banking will provide strength
Following the spin-off, The Magnum Ice Cream Company, which is part of the Unilever Group, will purchase a 61.9 per cent stake in Kwality Walls. This will provide global strategic support and brand power to the standalone entity, which can accelerate the pace of expansion and innovation.
What does it mean for investors?
Now investors will get the opportunity to invest directly in an independent ice cream business instead of indirect exposure through HUL. Market experts believe that a pure-play structure can differentiate business growth, margins and valuation—especially amid the demand spike during the summer season.
The consolidated net profit of Hindustan Unilever Limited (HUL), a household goods manufacturing company, doubled on an annual basis to Rs 6,603 crore in the third quarter of the current financial year. HUL recently told the stock market that the company had sold its ice cream business to Quality Walls (India) Limited in the October-December quarter of the financial year 2025-26, due to which this increase in its profit was recorded.
Net profit, excluding extraordinary loss, increased by one per cent to Rs 2,562 crore. Its profit before extraordinary items and tax was Rs 3,495 crore. Its revenue from sales of products increased by 5.71 percent to Rs 16,197 crore in the quarter under review. In the same quarter of 2024-25 it was Rs 15,322 crore. HUL’s total expenses in the October-December quarter increased by 6.37 percent to Rs 13,078 crore. Its total income including other revenues rose 5.01 per cent to Rs 16,580 crore.
Company management statement
The company said it recorded extraordinary items (loss) of Rs 576 crore during the quarter due to the implementation of the new labor codes. “Net profit stood at Rs 6,603 crore, an increase of 121 per cent over the previous year. The increase was primarily due to one-time positive impact arising from the sale of the ice cream business,” the company said.
Priya Nair, Chief Executive Officer (CEO) and Managing Director of the company, said, “During the quarter, demand trends showed early signs of improvement supported by supportive policy measures. We continued to drive mass traction with our brands, drive market growth in high-growth demand segments and strengthen our capabilities to expand into future channels with a dedicated organization for accelerated commerce.”
(Disclaimer: This article is for informational purposes only and should not be construed as investment advice in any way. ET NOW Swadesh recommends its readers and viewers to consult their financial advisors before taking any money-related decisions.)
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