Kwality Wall’s (India) Limited, the newly demerged ice cream business of Hindustan Unilever Limited (HUL), has announced its unaudited financial results for the quarter ended December 31, 2025 (Q3 FY26).

The company reported revenue of ₹222 crore during the quarter, but posted an EBITDA loss of ₹64.2 crore due to several factors including commodity inflation, one-time trade investments and costs related to transitioning into a standalone listed entity.

The results also mark an important milestone for the company because this is among the first financial disclosures after the demerger of the ice cream business from Hindustan Unilever.

Kwality Wall’s shares were listed on Indian stock exchanges on February 16, 2026, marking the beginning of its independent journey as a separate listed company.

Background of Kwality Wall’s India Demerger

Kwality Wall’s (India) Limited was incorporated on January 10, 2025 as part of a strategic restructuring by Hindustan Unilever Limited.

The ice cream business previously operated as part of HUL’s Foods and Refreshment segment.

However, in order to create a focused ice cream company with dedicated growth strategy, the business was separated through a demerger that became effective on December 1, 2025.

After the demerger:

• The ice cream business was transferred to Kwality Wall’s (India) Limited

• The company became an independent entity

• Shares were listed on BSE and NSE in February 2026

Because the company did not operate independently earlier, financial comparisons for Q3 FY25 were prepared on a pro forma basis to ensure comparability.

Q3 FY26 Financial Performance

For the quarter ending December 31, 2025, Kwality Wall’s India reported the following financial results:

Revenue

The company recorded sales of ₹222 crore during the quarter.

Organic Sales Growth

Organic sales declined by 6.5 percent year-on-year, reflecting challenges during the quarter.

Volume Growth

Despite the sales decline, volume growth remained positive at 1.2 percent, indicating stable demand for certain products.

EBITDA Performance

The company reported:

• EBITDA loss of ₹64.2 crore

• EBITDA loss of ₹83.8 crore before IND AS 116 accounting adjustments

These losses were largely driven by lower margins and continued investments across the business value chain.

Factors Affecting Profitability

Several factors contributed to the EBITDA loss reported during the quarter.

Trade Investments

The company made one-time trade investments of about 600 basis points to liquidate higher MRP stock in the market.

These investments were necessary to align product pricing and manage inventory following the business restructuring.

Commodity Inflation

Another major factor affecting margins was commodity price inflation, especially:

• Cocoa prices

• Dairy ingredients

• Energy costs

Commodity inflation contributed approximately 400 basis points of pressure on gross margins.

Transition to Standalone Company

Since the demerger, Kwality Wall’s is now operating as a separate listed company, which has led to:

• Higher employee expenses

• Increased operational costs

• Investments in supply chain and infrastructure

These costs are part of the company’s long-term strategy to build independent capabilities.

Exceptional Expenses

During the quarter, the company also reported exceptional expenses amounting to ₹94 crore.

These costs were largely non-recurring expenses recognised during the transition period following the demerger.

Such exceptional expenses typically include:

• Restructuring costs

• Integration and separation expenses

• Operational transition adjustments

Because these are one-time items, they may not necessarily reflect the company’s long-term profitability.

Performance of Key Product Categories

The company reported mixed performance across different segments of its product portfolio.

Impulse Ice Cream Segment

The impulse portfolio, which includes ice creams purchased for immediate consumption, performed relatively well.

This segment recorded mid-single digit volume growth during the quarter.

Impulse products are typically sold through:

• Retail stores

• Street vendors

• Quick commerce platforms

• Convenience outlets

In-Home Ice Cream Segment

However, the in-home portfolio, which includes larger packs meant for home consumption, saw muted demand during the quarter.

The company has announced plans to relaunch this portfolio with improved offerings ahead of the 2026 summer season.

Strong Performance of Premium Brands

Despite overall challenges, premium ice cream brands performed strongly during the quarter.

The company’s premiumisation strategy is driven mainly by:

• Magnum

• Cornetto

These brands delivered strong volume growth and helped expand the consumer base.

Premium products are important because they:

• Increase average selling price

• Improve brand perception

• Drive higher margins

The company plans to continue expanding premium offerings and new product innovations.

Growth in Quick Commerce Channels

One of the key growth drivers for the company was the quick commerce (Q-commerce) channel.

Sales through quick commerce platforms recorded strong double-digit growth during the quarter.

Quick commerce has emerged as a major opportunity for ice cream brands because it enables:

• Fast delivery

• Convenient purchasing

• Impulse buying behaviour

The channel is also helping companies reach urban consumers and expand premium product sales.

Expansion of Distribution Network

Another important focus area for the company has been expanding its physical distribution network.

Kwality Wall’s has been increasing the number of company-owned ice cream cabinets placed at retail outlets.

These cabinets allow the company to:

• Increase product availability

• Improve retail visibility

• Strengthen cold chain infrastructure

The company reported that numeric distribution of cabinets increased during the quarter, supporting deeper retail penetration.

Digitalisation of Route to Market

The company is also investing in digitalisation of its route-to-market systems.

This includes:

• Advanced data analytics

• Improved distribution management systems

• Better retailer servicing tools

These digital initiatives are expected to help the company optimize supply chains and improve operational efficiency.

Cost Efficiency and Productivity Initiatives

Kwality Wall’s has launched several initiatives aimed at improving cost productivity across the value chain.

These include:

Procurement Improvements

The company has been focusing on:

• Specification harmonisation

• Strategic supplier partnerships

• Alternative sourcing options

These efforts are helping the company build a more competitive cost structure.

Logistics Optimisation

The company is also working on:

• Developing regional distribution networks

• Improving warehousing infrastructure

• Enhancing logistics efficiency

These initiatives are expected to reduce distribution costs and improve asset utilisation.

Management Commentary

Chitrank Goel, Deputy Managing Director of Kwality Wall’s (India) Limited, highlighted the significance of the quarter.

According to him, the period represents an important milestone as the company begins external reporting after the demerger.

He also noted that the Indian ice cream market offers strong long-term growth potential due to several factors:

• Low per capita ice cream consumption

• Increasing refrigerator penetration in homes

• Growth of quick commerce platforms

• Expansion of snacking consumption occasions

Despite the challenges during the quarter, the company believes that strong brands such as Magnum and Cornetto demonstrate the resilience of its portfolio.

Outlook for the Ice Cream Market in India

India’s ice cream market is considered one of the fastest-growing segments in the food industry.

Several structural factors support this growth:

• Rising urbanisation

• Increasing disposable incomes

• Expansion of modern retail

• Growth of online and quick commerce channels

In addition, improving cold chain infrastructure and refrigeration availability is making ice cream products accessible to more consumers.

Business Outlook for Kwality Wall’s

Looking ahead, the company expects growth momentum to strengthen starting from the 2026 summer season.

Its strategy will focus on:

• Product innovation

• Expanding consumption occasions

• Increasing distribution reach

• Strengthening premium product portfolio

These initiatives aim to drive volume-led growth and deeper market penetration.

However, the company has also cautioned that near-term costs may remain elevated due to investments in growth initiatives.

Commodity Cost Outlook

The company expects mixed trends in raw material costs.

Dairy

Dairy prices are expected to remain elevated due to tight milk supply and higher fodder costs.

Sugar

Sugar prices may remain slightly inflationary due to possible increases in the minimum selling price (MSP).

Cocoa

Cocoa prices have moderated slightly but remain sensitive to currency movements.

Energy

Energy costs remain volatile due to geopolitical uncertainties, which could affect production and logistics expenses.

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