HEG Advanced Materials completes graphite demerger September 1

HEG Advanced Materials Limited completed the demerger of its graphite undertaking and the amalgamation of Bhilwara Energy Limited effective September 1, 2026, with ₹526.57 crore of September-quarter graphite revenue reported as discontinued operations. The company’s continuing standalone operations reported revenue of ₹7.59 crore for the quarter ended September 30, 2026.

What changed under HEG Advanced Materials’ September 2026 scheme?

HEG Advanced Materials completed a composite scheme that moved its graphite undertaking into HEG Limited, the resulting company, and merged Bhilwara Energy into HEG Advanced Materials. The National Company Law Tribunal, Indore Bench approved the scheme on August 13, 2026, and the boards recorded September 1, 2026 as the effective date. The scheme’s appointed date was April 1, 2024.

The transferred graphite undertaking included overseas investments and assets and liabilities relating to the TAWA power plant. HEG Advanced Materials derecognised the undertaking’s assets, liabilities and reserves from its books on the effective date. Its investment in the resulting company’s equity share capital was cancelled, and contingent liabilities associated with the graphite undertaking were transferred to the resulting company.

Bhilwara Energy was amalgamated with HEG Advanced Materials using the pooling-of-interest method under Appendix C to Indian Accounting Standard 103, or Ind AS 103, which covers business combinations under common control. Bhilwara Energy’s assets, liabilities and reserves were recognised at carrying amounts from April 1, 2024. HEG Advanced Materials issued fully paid equity shares with a face value of ₹2 each to eligible Bhilwara Energy shareholders on the September 1, 2026 record date.

The scheme required differences arising from the graphite transfer to be adjusted in capital reserve rather than operating income. The difference between Bhilwara Energy’s transferred net assets and reserves, the cancelled investment and the face value of shares issued was also recognised in capital reserve. HEG Advanced Materials said its September 30, 2026 standalone balance sheet is therefore not directly comparable with prior reporting dates.

How did the demerger change HEG Advanced Materials’ earnings presentation?

HEG Advanced Materials now reports the graphite undertaking as discontinued operations under Ind AS 105, which addresses non-current assets held for sale and discontinued operations. For the quarter ended September 30, 2026, discontinued operations recorded revenue of ₹526.57 crore and profit after tax of ₹96.79 crore. Continuing operations reported revenue of ₹7.59 crore and profit after tax of ₹36.47 crore.

The separation changes what standalone continuing revenue represents. Continuing revenue increased from ₹3.09 crore in the quarter ended June 30, 2026 and ₹6.85 crore in the quarter ended September 30, 2025 to ₹7.59 crore in the latest quarter. Discontinued-operation revenue declined from ₹680.91 crore sequentially and ₹696.84 crore a year earlier to ₹526.57 crore.

For the half year ended September 30, 2026, discontinued operations generated revenue of ₹1,207.48 crore, compared with ₹1,309.63 crore in the corresponding prior-year half year. Profit after tax from discontinued operations increased to ₹192.45 crore from ₹182.58 crore despite the lower revenue. Total profit after tax for the half year was ₹245.05 crore, compared with ₹261.46 crore a year earlier.

What did graphite and power contribute before the transfer?

Graphite accounted for all ₹526.57 crore of discontinued-operation segment revenue in the September 2026 quarter, while the power segment recorded no revenue in that quarter. In the June 2026 quarter, graphite revenue was ₹677.77 crore and power revenue was ₹3.14 crore. In the September 2025 quarter, the respective figures were ₹686.21 crore and ₹10.63 crore.

Graphite segment result was ₹113.78 crore in the September 2026 quarter, down from ₹133.55 crore in the June 2026 quarter but above ₹74.36 crore a year earlier. The power segment reported a loss of ₹1.15 crore in September 2026, compared with profit of ₹1.10 crore in June 2026 and ₹5.94 crore in September 2025. Profit before tax from discontinued operations was ₹133.99 crore in the latest quarter.

HEG Advanced Materials classified the graphite undertaking’s results up to the effective date as discontinued operations and applied the classification to comparative financial information. The auditor’s review report said the demerger was accounted for in the current quarter from September 1, 2026 and did not modify its conclusion on this matter.

What remains in HEG Advanced Materials’ continuing standalone business?

HEG Advanced Materials’ continuing standalone operation is primarily a power business selling power to a single customer. The company reports one operating segment for continuing operations under Ind AS 108, or Operating Segments. Its ₹7.59 crore of revenue in the September 2026 quarter was supplemented by ₹42.42 crore of other income, taking total income to ₹50.01 crore.

Continuing operations reported profit before tax of ₹38.48 crore for the September 2026 quarter, compared with ₹25.67 crore in the preceding quarter and ₹88.54 crore a year earlier. Total expenses were ₹11.53 crore, versus ₹11.57 crore in June 2026 and ₹22.76 crore in September 2025. A net tax credit of ₹2.88 crore, including deferred-tax effects, resulted in continuing profit after tax of ₹36.47 crore.

The company said its wind-power operations are seasonal because they depend on weather and wind conditions. Most operations occur from the start of summer through the end of the rainy season, usually within April to September or a shorter period. It consequently said performance for the half year ended September 30, 2026, when continuing revenue was ₹10.68 crore, is not strictly comparable across periods.

How did the scheme reshape HEG Advanced Materials’ balance sheet?

HEG Advanced Materials reported standalone total assets of ₹2,146.43 crore at September 30, 2026, compared with ₹6,317 crore at March 31, 2026. Property, plant and equipment fell to ₹48.13 crore from ₹1,784.69 crore, inventories fell from ₹1,133.74 crore to nil, and trade receivables declined to ₹7.71 crore from ₹502.71 crore. These movements reflect the derecognition of the transferred graphite undertaking.

Total equity was ₹2,106.52 crore at September 30, 2026, against ₹4,829.99 crore at March 31, 2026. Equity share capital increased to ₹65.96 crore from ₹38.60 crore following share issuance under the Bhilwara Energy amalgamation. Total liabilities declined to ₹39.91 crore from ₹1,464.87 crore, including current borrowings that fell from ₹793.28 crore to nil.

The reduction in reported assets and liabilities does not represent an ordinary period-on-period operational movement because the graphite undertaking left the company’s standalone books on September 1, 2026. Conversely, Bhilwara Energy’s assets, liabilities and reserves entered the accounts at carrying values under the pooling-of-interest method. The company specifically cautioned that the September 2026 balance sheet cannot be directly compared with earlier balance sheets.

Conclusion

The effective scheme has recast HEG Advanced Materials’ standalone financial profile. Graphite, which produced ₹526.57 crore of revenue in the September 2026 quarter, is now a discontinued operation outside the continuing standalone business, while Bhilwara Energy has been amalgamated into the company. Continuing operations generated ₹7.59 crore of quarterly revenue, primarily from power sales to one customer.

Next, readers can track the seasonal continuing power business and the company’s financial reporting after the September 2026 recast. Management has also approved a revised estimated cost of about ₹2,350 crore for the 20,000 metric-tonne Phase 1 anode project, with a target commercial operation date of June 2027.