HUL Share Price Dip: Is This the Right Time to Buy After Ice-Cream Demerger?
HUL share price witnessed a sharp dip on December 5, 2025, as the stock started trading ex-ice cream business following the demerger record date. The stock opened at around ₹2,422 and dropped to an intraday low of ₹2,289 which is a 7% fall from the previous close of ₹2,462.
However, leading brokerage firm Nuvama Institutional Equities has maintained a strong buy rating with a target price of ₹3,200. This suggests a massive 33% upside potential from current levels. The demerger has separated the Kwality Wall’s ice cream business into a new entity called KWIL and shareholders will receive 1:1 shares of the new company.
The ice cream segment contributes only 3% to HUL’s total revenue but the demerger is expected to unlock significant value for investors. With the stock trading at lower levels due to technical adjustments, many market experts are calling this dip a golden buying opportunity for long term investors.
The mechanical price adjustment was expected as the ice cream business is valued at around ₹12,000 to ₹15,000 crore by analysts. This translates to approximately ₹50-60 per HUL share which explains the optical price drop.
Trading volumes spiked significantly as NSE and BSE conducted special pre-open sessions for price discovery.
The demerger became officially effective on December 1, 2025, after receiving approval from NCLT. Shareholders who held HUL shares on the record date will get equal number of KWIL shares in their demat accounts. The allotment is expected by December 29 and the new stock will list on exchanges in February 2026.
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The demerger has transformed HUL into a pure-play FMCG entity by spinning off its ice cream brands. These brands include popular names like Kwality Wall’s, Cornetto, Magnum, Feast and Creamy Delight. The ice cream segment generates annual revenue of approximately ₹1,800-2,000 crore but operates with low single digit margins. This makes it less profitable compared to HUL’s core FMCG products like soaps, detergents and personal care items.
Post demerger, HUL’s focus will sharpen on high margin categories. The company’s EBITDA margins are projected to improve by 50 to 60 basis points once the capital intensive ice cream business is separated. This margin expansion is a key reason why brokerages are bullish on the stock despite the near term price volatility.
The ice cream business faces seasonal demand fluctuations and requires significant working capital. By spinning it off, HUL can allocate resources more efficiently to fast growing segments like premium personal care and home care products. Brands like Ponds, Surf Excel and nutrition products are expected to drive future growth.
Nuvama Institutional Equities has given three strong reasons for their bullish stance. First is the value unlocking through the spin off structure. The ice cream unit will trade independently at around 5 times EV to sales ratio.
This frees up HUL’s core FMCG franchise which trades at 9 times EV to sales for better valuation multiples. Shareholders get direct exposure to both businesses instead of the ice cream segment being hidden in consolidated numbers.
Second reason is the margin resilience and growth prospects. Analysts expect Q4 FY26 to show strength with low single digit price hikes across categories.
The demerger adds 50 to 60 basis points to EBITDA margins as mentioned earlier. Focus on premiumization in personal and home care segments could drive mid single digit volume growth. Rural recovery is also showing early signs which will support overall demand.
Third factor is the leadership refresh at both companies. HUL appointed Priya Nair as new CEO in August 2025 and she brings fresh perspective to drive growth. KWIL has appointed Chitrank Goel as Deputy MD who comes with strong QSR and snacking experience from Unilever and Jubilant. This expertise will help KWIL grow faster in the competitive frozen desserts market.
Other brokerages also share positive outlook with minor variations. Motilal Oswal has a buy rating with ₹2,800 target price highlighting margin benefits. Morgan Stanley maintains equal weight rating at ₹2,335 showing conservative stance on near term volumes. Anand Rathi recommends buying the dip in the ₹2,400-2,450 support zone for potential breakout moves.
Social media buzz on platform X shows high engagement with over 26,000 views on top threads discussing the demerger. Around 70% of conversations are bullish with investors excited about value unlocking opportunity. Many retail investors are calling the current dip a tactical buying chance backed by strong brokerage targets.
The 1:1 share ratio has generated significant excitement among shareholders. Getting free KWIL shares without any additional investment is viewed as a major perk. The ice cream business has 15 to 20% growth potential and will benefit from recent GST cut from 18% to 5%. This tax reduction makes ice cream more affordable and could boost demand significantly.
Some concerns exist around short term volatility and the fact that ice cream is only 3% of HUL’s business. A few investors question why demerge such a small segment. However, experts explain that even small segments can create value when they have different growth profiles and margin structures. The weather sensitive nature of ice cream and its capital requirements made it suitable for separation.
From technical perspective, HUL share price is currently trading below its 5 day EMA of ₹2,509. The stock has 52 week high of ₹2,800 and low of ₹2,200. Current price of around ₹2,350-2,360 is closer to the lower end of this range. The intraday low of ₹2,289 has created a strong support level which held on high volumes.
The stock’s P/E ratio stands at 53.17 which is premium compared to FMCG sector average. This reflects HUL’s strong brand portfolio and consistent performance track record. Market capitalization is approximately ₹5.79 lakh crore making it one of India’s largest FMCG companies. Year to date performance shows around 6% gains despite recent weakness.
F&O contracts expired on December 4 and fresh contracts started trading on December 5. This adds to short term volatility as traders adjust their positions. KWIL will temporarily join Nifty 50 with a dummy zero price symbol until actual listing happens in February. This could bring index fund flows once the stock starts trading.
The current dip presents a good opportunity for long term investors to accumulate quality FMCG stock. HUL has defensive business model with strong brands and wide distribution network. Promoter holding of 61.9% provides stability and the company has consistent dividend paying track record.
The demerger is expected to unlock ₹50-60 value per share through KWIL. Combined with HUL’s core business growth potential, investors get exposure to two separate growth stories. Rural demand recovery and premiumization trends support positive outlook for coming quarters.
However, investors should be aware of risks. Prolonged rural slowdown could impact volumes and input cost inflation might pressure margins. Competition in FMCG space is intense with both organized and unorganized players. The stock also trades at premium valuations which limit downside protection.
For risk taking investors with 2 to 3 year horizon, buying in the ₹2,300-2,400 range looks attractive. Conservative investors can wait for KWIL listing to assess separate valuations before taking positions. Overall, the demerger story and brokerage targets suggest good upside potential from current levels.
Tags: HUL share price, Hindustan Unilever demerger, KWIL listing, ice cream business spin-off, HUL stock target 3200, buy HUL shares, FMCG stocks India
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