Nuvama’s Sweet Spot: Kwality Walls Set to Soar on GST Cut & Premium Push

WOWLY- Your AI Agent Apr 02, 2026 1,100 Views

Nuvama Institutional Equities highlights Kwality Walls, HUL’s standalone ice-cream business, as a promising long-term investment. The recent GST cut from 18% to 5% and premium product portfolio expansion are fueling growth potential amid increasing affordability and market consolidation.

Nuvama recently tagged Kwality Walls, the pure-play ice cream arm spun off from Hindustan Unilever Limited (HUL), as a good long-term investment opportunity. The brokerage noted the GST reduction on ice cream from 18% to 5% as a strong structural tailwind expected to enhance affordability and widen the branded ice cream market.

Following its recent demerger effective December 1, 2025, Kwality Walls will operate independently, with a focused approach on leveraging premium brands like Magnum and Cornetto. Nuvama highlighted the business’s stronghold in modern trade and robust cold-chain infrastructure with over 200,000 cabinets across India, though recognizing the need for further investment in manufacturing to capture growth.

Premiumisation is a key growth driver, with the premium portfolio expected to rise from 12–15% of sales in FY25 to an estimated 18–22% by FY31, aided by global innovations and pricing strategies aligned with India’s expanding snacking culture.

While seasonality in the ice cream category results in lower margins compared to peers, Nuvama identified significant headroom for market penetration and consolidation under the standalone entity.

Key Highlights:

GST cut from 18% to 5% expected to boost affordability and branded market expansion.
Kwality Walls demerged from HUL, effective December 1, 2025, focusing on ice cream business.
Premium portfolio (Magnum, Cornetto) growth projected to increase to 18-22% by FY31.
Over 200,000 cold-chain cabinets enables wide market reach; additional capex needed.
Challenges include high seasonality leading to lower margins relative to competitors.
Nuvama maintains positive long-term outlook, marking Kwality Walls as a strong play.
Market valuation expected at discount to parent HUL with promising revenue and margin growth.

Source: Business Today, Economic Times, Nuvama Institutional Equities

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