Hindustan Unilever Ltd (HUL), the country’s leading fast moving consumer goods (FMCG) maker, has decided to exit its ice cream business. The Mumbai-headquartered company’s board of directors on Monday decided that the ice cream division — represented by its master brand Quality Walls — will be a separately listed entity.
While the move has sparked excitement among a section of stakeholders, the country’s ice cream market is set to see a new decisive player enter the fray, one of the largest in the region. With annual sales of around Rs 2,000 crore, the business is already one of the largest ice cream businesses in India.
According to an analysis by Nuwama Institutional Equities, the business has a growth potential of 15-20% CAGR and boasts an EBIT margin of 5-9%. In comparison, industry peer Havemore posted sales of Rs 1,030 crore in FY24, while its EBITDA was Rs 180 crore and its EBIT margin was 11.2%.
According to Abnish Roy, executive director of Nuwama, the move will “allow more flexibility in focused management for the ice cream business”. It will “create a leading listed ice cream company in India, with focused management with greater flexibility.
It thus realizes its full potential to implement strategies tailored to its unique business model and market dynamics”, he says.
HUL’s move follows its London-based parent Unilever plc’s March 19 decision to spin off its ice cream business globally and cut its overall workforce by 7,500.
