HUL to create the largest Ice Cream company in India, post demerger

Hindustan Unilever Ltd. (HUL), the country’s leading fast moving consumer goods (FMCG) maker, has decided to demerge its ice cream business. The board of directors of the Mumbai-headquartered company decided on Monday that the ice cream division - represented by its master brand Kwallity Walls will be separate listed entity.

While the move has generated enthusiasm among a section of the stakeholders, the country’s ice cream market is set to witness a new decided player in the fray, which happens to be one of the largest in the field. With some Rs 2,000 crore yearly sales, the business is already one of the largest ice cream business in India.

As per analysis by Nuvama Institutional Equities, the business has a growth potential of 15-20% CAGR and boasts EBIT margins of 5–9%. In comparison, industry peer Havmor’s posted sales worth Rs 1,030 crore in FY24, while its EBITDA stood at Rs 180 crore and had an EBIT margin of 11.2%.

According to Abneesh Roy, Executive Director at Nuvama, the move “will allow more flexibility focused management for the ice cream business”. It “will create a leading listed ice cream company in India, which will have a focused management with greater flexibility
to deploy strategies suited to its distinctive business model and market dynamics thus realising its full potential”, he says.

HUL’s move came following a decision by its London-based parent Unilever Plc.’s 19th March decision to separate the ice cream business globally and cutting its overall workforce by 7,500.