MUMBAI: Kwality Wall’s is seeking to turn ice-cream from a summer indulgence into an everyday snack, as it charts an independent path following its separation from Hindustan Unilever Ltd.
The management is looking to engineer a shift in consumption habits to reduce the business’s reliance on summer sales, which currently account for about 60% of annual revenue.
“We are leading the shift of ice-cream, moving from a leisure snack or a leisure dessert to an everyday frozen snack. And that's what we intend to do,” Chitrank Goel, executive director of Kwality Wall’s (India) Ltd (KWIL), said in an interview ahead of the company’s listing on the stock exchanges on Monday.
The frozen desserts maker began trading as a standalone entity on stock exchanges on Monday after being spun off from HUL in December. Shares debuted at ₹29.90 on the BSE and closed at ₹29.51, valuing the company at just under ₹7,000 crore.
Chief financial officer Prashant Premrajka said richer, dairy- and chocolate-based offerings with more complex layers can drive all-season demand, while the rise of quick commerce platforms opens a new distribution channel.
"And that is where the channel shift of quick commerce comes in. That's an impulse category. When I want to snack, ice-cream is the healthiest choice that is available to me,” Premrajka said.
Global brands
Kwality Wall’s offers three key brands in India—Magnum, Cornetto and Kwality Wall’s—and is open to bringing global labels such as Ben & Jerry’s, Yasso and Carte D’or into the market.
“There is no set time (when) we will launch them, but we will definitely see that seamless flow of brands coming into India,” Goel said.
Before the demerger, the ice cream business contributed roughly ₹1,800 crore, or about 3%, to HUL’s turnover. HUL reported a one-time exceptional gain of ₹4,516 crore in the third quarter from discontinued operations related to the spin-off. HUL shareholders will receive shares in the new entity on a 1:1 basis. Following the transaction, The Magnum Ice Cream Co. will control Kwality Wall’s, and an open offer has been announced to acquire up to 26% of the company at ₹21.33 per share.
Nuvama Institutional Equities described the demerger as a net positive for HUL investors, citing direct ownership in a pure-play ice cream business with iconic brands, about ₹2,000 crore in revenue and potential for 15–20% compounded annual growth.
“The segment has historically delivered healthy EBIT [earnings before interest and tax] margins of 5-9%. The demerger of the ice-cream business shall create a leading listed ice-cream firm in India, which would have a focused management with greater flexibility to deploy strategies suited to its distinctive business model and market dynamics, thus realizing its full potential,” the brokerage said in a report on 19 November.
Kwality Wall’s enters a competitive landscape that includes listed players such as Vadilal Industries and Hatsun Agro, underscoring the challenge of sustaining growth beyond the summer months while scaling a category still heavily influenced by seasonality.