Hindustan Unilever (HUL) is taking its iconic ice cream brand Kwality Wall’s solo. The company announced the demerger of its ice cream business into a separate listed entity, Kwality Wall’s (KWIL).
Context: de-mergers are typically a good way for a company to create a standalone asset. Sometimes this helps expand the story better to investors, resulting in better valuations. Sometimes, the separation is simply operational, meant to weed out inefficiency.
The deets: HUL shareholders will receive one share of KWIL for every HUL share they own. The move aligns with Unilever’s global strategy to carve out its ice cream business into standalone entities.
What’s next for KWIL: KWIL will focus exclusively on ice cream, leveraging its brands like Cornetto, and Magnum.
The numbers: HUL’s ice cream segment brought in ₹1,595 crore in FY24, contributing 2.7% to total turnover.
Zoom out: India’s organised ice cream market is expected to go from just over $3 billion to $12 billion over the next 10 years, growing at a 15% CAGR.
And while we are on HUL 👆
The company also released its earnings yesterday, posting a profit of ₹2,989 crore, up 19% YoY. Revenue rose 1.6% YoY to ₹15,818 crore.
HUL also announced a ₹2,955 crore all-cash acquisition of a 90.5% stake in skincare startup Minimalist.
Minimalist was founded just 5 years ago and the deal is one of the largest in India’s D2C space.
HUL’s stock remained steady, showing little movement despite the news and positive earnings.
