Kwality Matters 👍

$NFLX's party, AI in the desert, and An FMCG bet.

Jan 23, 2025

🗓 Morning, folks 👋

📈 After a choppy ride this week, markets finished positive yesterday. The Nifty50 added 0.59%, and the Sensex rose over 0.75%.

Meanwhile, Trump optimism and AI has driven the S&P 500 to all time highs.

💡 Spotlight: India’s market story is actively being re-written by retail investors. NSE’s unique registered investors just crossed the 11 crore mark.

What’s crazy is that the latest 1 crore joined in just five months—a blistering pace compared to the 14 years it took to reach the first crore.

And for more perspective: retail investor count has jumped over 3.6x in the last five years.

Let’s hit it.

1 Big Thing: HUL scoops out Kwality Walls🍦

Hindustan Unilever (HUL) is taking its iconic ice cream brand Kwality Wall’s solo. The company announced the demerger of its ice cream business into a separate listed entity, Kwality Wall’s (KWIL).

Context: de-mergers are typically a good way for a company to create a standalone asset. Sometimes this helps expand the story better to investors, resulting in better valuations. Sometimes, the separation is simply operational, meant to weed out inefficiency.

The deets: HUL shareholders will receive one share of KWIL for every HUL share they own. The move aligns with Unilever’s global strategy to carve out its ice cream business into standalone entities.

What’s next for KWIL: KWIL will focus exclusively on ice cream, leveraging its brands like Cornetto, and Magnum.

The numbers: HUL’s ice cream segment brought in ₹1,595 crore in FY24, contributing 2.7% to total turnover.

Zoom out: India’s organised ice cream market is expected to go from just over $3 billion to $12 billion over the next 10 years, growing at a 15% CAGR.

And while we are on HUL 👆

The company also released its earnings yesterday, posting a profit of ₹2,989 crore, up 19% YoY. Revenue rose 1.6% YoY to ₹15,818 crore.

HUL also announced a ₹2,955 crore all-cash acquisition of a 90.5% stake in skincare startup Minimalist.

Minimalist was founded just 5 years ago and the deal is one of the largest in India’s D2C space.

HUL’s stock remained steady, showing little movement despite the news and positive earnings.

2. Streaming race is over, Netflix won it 🤷‍♂️

Netflix kicked off Big Tech earnings in the west — absolutely crushing it by adding 18.9 million new subscribers in Q4, more than twice that was expected by markets.

This pushed its global subscriber count past 300 million for the first time.

The numbers: revenue surged 16% YoY to $10.2 billion. Majority growth was driven by its $6.99 ad-supported plan, which accounted for over 55% of new sign-ups.

The affordable tier is drawing cost-conscious users, expanding Netflix’s reach amid tightening global consumer spending, while freeing up more $ for original programming.

Netflix management cited success localization strategies as one of the core reasons driving growth this quarter.

What’s new: with absolute dominance in TV and Movies, the next act is focusing on live content. Netflix is now showing WWE, Awards Shows Standup, Boxing matches, and a lot more.

Investors were thrilled, sending Netflix shares up 14%.

3. Masa is back, with more billions 🚀

Trump’s plan to put America into overdrive has met a new ally — Masa Son.

On Tuesday, the president unveiled Stargate, a $500 Billion AI infrastructure project, bankrolled by SoftBank’s Masayoshi Son, Oracle’s Larry Ellison, and OpenAI’s Sam Altman.

If you pause and think about the number for a second — $500 Billion is 1.8% of US’s GDP, 13% of India’s GDP, and twice what it cost to put a man on the moon.

The pitch: Stargate kicks off with $100 billion in funding and plans to build 10 AI data centers in Texas for now. The project is expected to create 10,000 jobs.

The players: SoftBank chairs the venture, with tech heavyweights like NVIDIA, Microsoft, and Oracle providing firepower.

Why it matters: with China ramping up its AI game, Stargate is America’s bold counterstrike. America has excess energy, plenty of land, and cheap risk capital — why not combine it all and see if intelligence can accelerate?

But here’s some counter perspective to balance the news out.

4. Reliance makes another consumer acquisition 🍯

Reliance Consumer Products acquired SIL, the 75-year-old packaged foods brand behind popular jams, sauces, and cooking pastes.

SIL has changed hands multiple times, with its latest owner, Food Service India, reporting ₹240 crore in FY24 revenue.

Why it matters: this acquisition strengthens RCPL’s FMCG play, adding to its growing portfolio of legacy brands like Campa. RCPL’s revenue reached ₹8,000 crore in the first nine months of FY25.

Big picture: India’s packaged food market is projected to hit ₹15 lakh crore by 2030.

What else are we snackin’ 🍿

🎤 IPO Buzz: Zepto is planning to scale its IPO size to $800M–$1B according to ET.

🤖 Sonar Launch: Perplexity launched an API service that lets enterprises integrate its generative AI search tools directly into their applications.

🗼 Jio Grows: Reliance Jio added 12 lakh wireless subscribers to its network in Nov.

🌱 Clean bet: Essar Group is planning to build eight gigawatts of clean battery energy in Maharashtra. This is the coal and gas firm’s first foray into renewables.

That’s a wrap! Don’t let the weekday blues get to you.

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