Kwality Walls shares falls 8% after announcing its Q3 results; Check the details

SYNOPSIS: One of India’s foremost ice cream and frozen dessert companies reported its first quarterly results after listing, posting Rs. 223 crore revenue in Q3 FY26 with widening losses and negative EBITDA.

During Monday’s trading session, shares of one of India’s foremost ice cream and frozen dessert companies slipped nearly 8.4 percent to hit a fresh 52-week low at Rs. 24.1 on BSE, after the company reported a widening in the net losses by around 78 percent QoQ, and revenue fell by 31 percent QoQ.

With a market cap of Rs. 5,857.5 crores, shares of Kwality Walls (India) Limited were trading in the red at Rs. 24.82 on BSE, down by around 6 percent, compared to its previous closing price of Rs. 26.3.

Financial Performance Q3 FY26

Kwality Walls (India) Limited announced the financial results for the third quarter of FY26 on Friday after market hours, as per the latest regulatory filings with the stock exchanges. This is the first quarterly result reported by the company following its listing after the demerger from Hindustan Unilever Limited (HUL). 

The demerger from HUL has been successfully completed, and the company’s equity shares were listed on the stock exchanges on 16th February 2026, establishing Kwality Walls (India) as a separately listed entity focused on the ice cream and frozen desserts business.

For Q3 FY26, the company posted revenue of Rs. 223.43 crores, reflecting a sequential decline of around 31 percent QoQ compared to Rs. 321.73 crores in Q2 FY26. On a cumulative basis, the company recorded revenue of Rs. 1,759.65 crore during 9M FY26.

On the profitability front, the company reported a net loss of Rs. 178.38 crore for the quarter, representing a 78 percent widening in losses QoQ compared to Rs. 100.16 crore reported in Q2 FY26. For 9M FY26, the company reported a total net loss of Rs. 261.3 crore.

During the quarter, the company also recognised exceptional expenses of Rs. 94 crore, primarily related to non-recurring costs recognised in the current period.

Operating performance deteriorated during the quarter, with EBITDA before exceptional items reported at a loss of Rs. 64 crores, reflecting the impact of lower gross margins and continued growth, which led to investments made across the value chain.

For Q3 FY26, Kwality Walls reported organic sales growth (OSG) of -6.5 percent YoY and volume growth of 1.2 percent. The impulse portfolio delivered mid-single digit volume growth during the quarter. However, the in-home portfolio saw a muted response and is planned to be relaunched with an improved offering for the 2026 season.

Gross margin for the quarter stood at 41.5 percent, impacted by one-off trade investments of ~600 bps related to higher MRP stock liquidation, as well as ~400 bps due to commodity inflation led by cocoa prices. 

Business Outlook and More

Looking ahead, Kwality Walls remains focused on executing its growth strategy with a strong emphasis on innovation and expanding consumption occasions. Management expects growth momentum to strengthen from the 2026 season onward, supported by differentiated product offerings at strategic price points, wider distribution reach, and continued premiumisation of the product portfolio. These initiatives are expected to support market penetration.

At the same time, the company continues to prioritise disciplined cost management and productivity improvements across the value chain. While ongoing investments in capability building and growth initiatives may keep the cost base relatively elevated in the near term, these investments are expected to generate operating leverage over time and support margin expansion as volumes scale up.

On the input cost front, the outlook remains mixed in the near term. Dairy prices are expected to remain elevated, driven by tighter milk supply, lower yields, and persistently high fodder costs, which continue to keep dairy and related derivative prices firm. Sugar prices may remain mildly inflationary due to potential increases in the minimum selling price (MSP).

Although cocoa prices have moderated from recent highs, the benefit is partly offset by currency depreciation. Meanwhile, energy prices remain volatile amid ongoing geopolitical developments, which could limit the pace of overall cost relief.

Kwality Wall’s (India) Limited (KWIL) is one of India’s foremost ice cream and frozen dessert companies, offering a portfolio of brands including Kwality Wall’s, Magnum and Cornetto.

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