- Kwality Walls listed on Monday, February 16 following demerger from Hindustan Unilever Limited (HUL)
- Although its products are a household name, Kwality Walls has a history of low margins
- The main risks it faces include tight competition and high operation costs
Kwality Wall’s India Limited (NSE: KWIL) started trading on February 16, 2026, marking the first time an ice cream company in India has been listed as its own entity. The stock started lower than expected, opening at ₹29.80 on the NSE, which is about 26% below the expected ₹40.20. It closed the first day down about 27%.
The second day saw more losses, with the stock dropping another 5% to around ₹28.20–₹28.50. This article seeks to find the answers as to why a well-known ice cream brand with strong parentage is facing such a muted reception.
Why Kwality Walls Stock Started Weak
The main reason for the lower price is how the ice cream business is valued on its own. While the brand is well-known, it only made up about 3% of HUL’s sales and had lower profit margins (around mid-single digits) compared to HUL’s main businesses.
Nuvama Institutional Equities analysts pointed out that the business has had lower EBITDA margins in the past, making a case for its vulnerability. The EBITDA was around 7.1% in FY25, even dropping to breakeven in H1FY26 compared to competitors like Vadilal (18.5%) and Havmor. Now that it’s on its own, Kwality Walls no longer has the stability of HUL’s wider range of products.
Investors are also reacting to an offer from The Magnum Ice Cream Company (TMICC) to buy 26% of the company at just ₹21.33 per share. This makes the current market price of ₹28 seem high to some, even though ICICI Securities had suggested a fair value closer to ₹40–50.
Sales are also heavily dependent on the summer months, which means revenue and cash flow can be uneven. after the split, some investors who received shares chose to sell them to take profits or adjust their portfolios.
Risks and Signals Investors Should Watch Out For
It’s best to wait until the Trade-for-Trade (T-Group) period is over before investing. For the first 10 sessions, KWIL can only be traded with delivery, which reduces trading activity.
Investors should look for signs of stable operations before buying in. Important signs to watch include improved EBITDA margins, success in selling higher-priced products (aiming for 18–22% of the portfolio by FY31), and strong performance in online sales. Strong Q1FY27 results with double-digit revenue growth and steady orders would also be a good sign.
The main risks include high seasonality, intense competition from Amul and regional players, and the need for significant capex to expand manufacturing and distribution. Margin pressure could persist if raw material costs rise or premium products fail to gain traction.
Kwality Wall Stock Price Forecast
Kwality Walls stock is currently in a phase where the price is still being determined, with high swings and not much past data to compare to. The immediate support level is around ₹27.50, which is where some buying interest appeared after the listing. If the stock falls below this level, it could drop to the open-offer price of ₹21.33. On the upside, resistance is around ₹31.30, which was the high on its first day of trading.
The 26% discount reflects investor concerns about the business’s low margins and the high investment needed for the cold-chain model, which is different from HUL’s simpler distribution approach.
The sharp drop was caused by continued profit-booking and cautious sentiment toward the standalone ice cream business, coupled with limited liquidity in early trading sessions.
The biggest risks include high sales seasonality, intense competition, pressure on profit margins, and the need for large capital to expand manufacturing and distribution capabilities independently.