Kwality Wall's share price
Kwality Wall's, India's first-ever pure-play in the ice cream business, saw a bland investor response upon its listing.
Despite having well-known brands like Cornetto, and Magnum under its umbrella, the stock listed more than 20 per cent lower than its 'discovered price' on the stock exchanges earlier this week.
It further hit a 52-week low of ₹26.64 per share on the BSE on Wednesday – a 30.17 per cent discount to its discovered price. Going ahead, analysts predict further volatility in the stock in the near-term.
Kwality Wall's discounted listing, analysts said, reflects market concerns about the company’s margin profile. "Its earnings before interest, tax, depreciation, and amortization (Ebitda) margin was at 7.1 per cent in financial year 2024-25 (FY25), which dropped to break-even level in the first half of the ongoing financial year (H1FY26), and is half of peers like Vadilal (18.5 per cent Ebitda margin)," said Vaqarjaved Khan, senior fundamental analyst at Angel One.
He suggested investors watch the company's quarterly earnings over the next few months before making any investment decision.
On Thursday,
Kwality Wall's share price dropped 3.8 per cent in the intraday trade, before recouping some of the losses to quote 0.9 per cent lower at ₹29.15 per share on the BSE at 9:35 AM. By comparison, the
BSE Sensex index was down 50 points at the same time.
Kwality Wall's listing
On February 16, 2026, Hindustan Unilever’s (HUL's) ice-cream arm listed on the National Stock Exchange (NSE) at ₹29.80 per share, around 26 per cent lower than the NSE-discovered price of ₹40.20.
On the BSE, the stock listed at about ₹29.90, a discount of over 21 per cent to the BSE-discovered price of ₹38.15.
Analysts had pencilled in a 5x Enterprise Value-to-sales (EV/sales) valuation (₹50–55 per share) -- a discount to HUL’s ~9× EV/sales -- for Kwality Wall's as a focused ice-cream business with a strong brand recall across India’s urban and semi-urban markets.
"The actual listing, however, suggests that the market has applied a deeper discount, possibly 3–3.5x sales, reflecting execution and seasonality risks," said a note by JM Financial.
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Despite having a strong parentage of HUL, analysts said the stock may face continued volatility as early stock holders rotate and the market tries to discover the fair EV/sales multiple relative to global and domestic ice-cream/QSR names.
Ice-cream business, they said, is highly seasonal and the performance is skewed towards summer quarters. As the stock’s listed just after winter months, the company’s reported numbers looked soft, which dented sentiment.
Investors, thus, may prefer to wait for one or two full standalone result cycles before assigning premium multiples to the newly-listed carved-out unit, JM Financial added.
That apart, brokerages pointed out that domestic flows have been rotated towards PSUs, banks, and select consumption names, while some FMCG and discretionary names have seen valuation fatigue.
In a market where risk appetite remains weak, demerged consumer plays like Kwality Wall’s, having no long, independent track record of financials, may see limited investor interest, analysts said.
Another factor, Vaqarjaved Khan of Angel One said, is the capital-intensive nature of the company in a hyper-seasonal environment (60 per cent of sales in four summer months), along with competitive pressure from Amul and other regional players.
Without HUL's balance-sheet absorbing off-season working capital swings, investors may remain wary of execution risk. Besides, fluctuations in milk, cream, sugar, cocoa, packaging and energy costs, along with high capex/maintenance for freezers and cold-chain logistics, pose risks to margins.
"Q1FY27 results will be an important quarter for the company as investors would see if the 5-per cent GST cut triggered volume recovery and margins stability," Khan added.
Nonetheless, the company's strong global parentage, established brand equity, and scalable operating model may support favourable valuations over medium-to-long term, said Vinod Nair, head of research, Geojit Investments Limited.
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