HUL demerger: Kwality Walls to list in Feb 2026? Likely listing price, key concerns

Nuvama Institutional Equities on Tuesday said Kwality Walls, the pure-play ice-cream business of Hindustan Unilever (HUL), is expected to list in February, likely at 5 times EV/sales, implying a valuation of Rs 50–55 per share. This would be at a discount to HUL’s 9 times EV/sales. The brokerage stayed positive on HUL and retained its 'Buy' rating with an unchanged target price of Rs 3,200. The demerger scheme became effective on Monday, December 1. The record date for the same is fixed as December 5. 

HUL shareholders as on the record date, i.e. Friday, will receive one equity share of Kwality Walls for every one equity share held by them in HUL, upon effectiveness of the Scheme. 

As a standalone entity post demerger, Kwality Walls may offer a focused long-term play on the GST cut for ice cream, from 18 per cent to 5 per cent, which  is viewed as a structural tailwind for affordability and formalisation. Nuvama said the business had strong moats: leadership in modern trade and e-commerce, a premium brand portfolio (Magnum, Cornetto) supported by Unilever’s global innovation pipeline, and a cold-chain network of over 2,00,000 cabinets.

However, it cautioned that the category’s high seasonality—similar to carbonated drinks, beer and talc—kept margins structurally lower versus peers. Kwality Walls now also needed more clarity on capex and cash levels, given the likely requirement to invest in additional manufacturing and touchpoints, Nuvama said.

The brokerage highlighted that Kwality Walls’ leadership had been refreshed, with Chitrank Goel appointed Deputy Managing Director. Goel, an ex-Unilever and ex-Jubilant FoodWorks executive who previously headed the Dunkin business, brought over 20 years of experience across Foods-CPG, QSR/Retail and snacking in India and Europe. Prashant Premrajka, CFO, had over 21 years of experience at Unilever.

Kwality Walls reported an Ebitda margin of 7.1 per cent in FY25, which compressed to breakeven in H1FY26, well below Vadilal’s 18.5 per cent and Havmor’s 17–18 per cent. Nuvama said visibility on investments in manufacturing and distribution would be crucial for margin recovery.

Despite having one of India’s largest cold-chain networks with over 2,00,000 cabinets, the business remained underpenetrated relative to the 40–50 lakh CSD outlets, indicating considerable headroom for expansion. The premium portfolio, Magnum, Cornetto and Walls, is expected to grow from 12–15 per cent of sales in FY25 to 18–22 per cent by FY31E, aided by global technologies, innovation and a refreshed pack-price ladder aligned with India’s Rs 10–Rs 50 snacking spectrum.

The GST reduction to 5 per cent is expected to materially improve affordability and widen the branded market. As an impulse category, ice-cream volumes responded quickly to lower taxes, and Nuvama said the category growth could accelerate above the expected 11 per cent CAGR over FY25–30E. A focused standalone entity, it added, would be better placed to drive penetration and consolidate leadership.