Hindustan Unilever (HUL) Share Drop Analyzed

Key Points

• HUL shares fell 7%, impacting investor confidence significantly.
• Ice cream demerger triggered selling pressure, key deadline nears.
• NCLT approved demerger scheme, setting December 1, 2025, as effective date.
• New ice cream company expected with growth potential & strong brands.
• Analysts value the ice cream business separately, lower EV/Sales ratio.
• Kwality Wall’s stock anticipated listing at 5x EV/Sales valuation.

HUL Share Performance

Hindustan Unilever (HUL) shares experienced a significant drop on the BSE, decreasing by 7%. This decline brought the share price to a low of ₹2,289. The drop occurred alongside anticipation surrounding the planned separation of HUL’s ice cream business – Kwality Wall’s – creating uncertainty among investors.

At 10:30 AM, HUL’s stock was trading at ₹2,371.05, representing a 2.18% decrease compared to the morning’s opening. Meanwhile, the broader BSE Sensex was rising by 0.21%, indicating a generally positive market trend that contrasted with HUL’s performance.

HUL’s market capitalization stands at a substantial ₹5,58,145.4 crore. The company’s stock has traded within a range of ₹2,136 (low) to ₹2,779.7 (high) over the past 52 weeks. This fluctuation highlights the volatility associated with the company’s stock.

Ice Cream Demerger Details

The planned demerger involves separating HUL’s ice cream business, Kwality Wall’s, into a separate company. This separation was initially set for completion by December 5, 2025, but a key milestone – the scheme of arrangement – was approved by the National Company Law Tribunal (NCLT) on November 6, 2025.

The scheme’s effective date, the date when the new company officially starts operating, is December 1, 2025. This aligns with the first day of the calendar month, as confirmed in a company filing. Importantly, the demerger will not change the ownership structure of HUL itself.

Existing HUL shareholders will receive one share for every share they own in HUL, giving them direct ownership of the new ice cream company. Analysts predict the ice cream business will be valued differently than HUL’s core operations due to its lower profit margins and smaller scale.

Nuvama Institutional Equities estimates the ice cream business accounts for roughly ₹50–55 of HUL’s current share price (approximately ₹2,400). They also anticipate Kwality Wall’s stock will list on the market in February, likely valued at a 5 times Enterprise Value to Sales (EV/Sales) ratio.

This separation presents an opportunity for investors to focus on the growth potential of the pure-play ice cream company, which is projected to have annual revenue of approximately ₹2,000 crore and a potential compound annual growth rate (CAGR) of 15-20%.

Ultimately, the ice cream demerger offers a focused investment opportunity within a recognized brand portfolio.