Hindustan Composites books Rs 276.77 crore exceptional profit

Hindustan Composites Limited completed the slump sale of its Friction Business Undertaking on 20 August 2026 and recorded Rs 276.77 crore as an exceptional profit in the September quarter, while its half-year cash flow showed Rs 321.38 crore of sale proceeds net of expenses and advance tax paid.

When did Hindustan Composites complete the friction business sale?

Hindustan Composites completed the transfer of its Friction Business Undertaking effective 20 August 2026. The company said the undertaking was transferred as a going concern through a slump sale basis.

The accounting impact was recorded in the quarter ended 30 September 2026, when Hindustan Composites recognised Rs 276.77 crore of profit from the transaction as an exceptional item. This item lifted profit before tax from continuing operations to Rs 282.18 crore for the quarter, compared with Rs 5.41 crore before exceptional items.

The sale also changed how the former business is presented in the accounts. Hindustan Composites classified the undertaking as discontinued operations under Indian Accounting Standard 105, or Ind AS 105, which covers non-current assets held for sale and discontinued operations. The company said comparative-period figures were reclassified accordingly, separating the sold operation from continuing activities.

How much cash did the friction business sale generate?

Hindustan Composites reported Rs 321.38 crore of proceeds from the sale in investing cash flow for the half year ended 30 September 2026, net of expenses and advance tax paid. The proceeds were larger than the company’s Rs 187.30 crore of investment purchases during the same half-year period.

Net cash generated from investing activities was Rs 185.02 crore in the half year, compared with net cash used of Rs 127.50 crore in the corresponding half year ended 30 September 2025. The change followed the sale proceeds alongside Rs 55.55 crore of proceeds from selling investments, while investment purchases and other outflows remained part of investing cash flow.

The cash-flow statement reported a net increase in cash and cash equivalents of Rs 211.40 crore for the six months to September 2026, compared with a Rs 9.47 crore decrease a year earlier. Cash and cash equivalents at the end of the half year were Rs 215.51 crore, including Rs 215.36 crore invested in overnight mutual funds.

How did the sale affect Hindustan Composites’ September-quarter earnings?

Hindustan Composites reported Rs 242.57 crore of total profit after tax for the quarter ended 30 September 2026, compared with Rs 5.28 crore in the quarter ended 30 September 2025. The main driver was the Rs 276.77 crore exceptional profit recorded within continuing operations following the transaction.

Profit after tax from continuing operations was Rs 240.55 crore in the September 2026 quarter, versus Rs 58 lakh a year earlier. Current tax expense was Rs 43.36 crore and deferred tax was a credit of Rs 1.73 crore in the quarter, after profit before tax from continuing operations reached Rs 282.18 crore.

Excluding the exceptional item, continuing-operations profit before tax was Rs 5.41 crore, up from Rs 23 lakh a year earlier and Rs 1.58 crore in the June 2026 quarter. Continuing-operations revenue was Rs 34.20 crore, against Rs 14.17 crore in September 2025, with commodity-trading revenue of Rs 22.34 crore and investment revenue of Rs 11.86 crore.

What was the financial contribution of the discontinued friction business?

Hindustan Composites reported Rs 2.02 crore of profit after tax from discontinued operations in the quarter ended 30 September 2026. That was below Rs 4.70 crore in the September 2025 quarter and Rs 6.75 crore in the June 2026 quarter, following the effective transfer on 20 August 2026.

For the half year ended 30 September 2026, discontinued-operations revenue was Rs 128.69 crore, down from Rs 146.87 crore in the corresponding prior-year half year. Profit before tax from those operations declined to Rs 10.91 crore from Rs 15.87 crore, while profit after tax declined to Rs 8.77 crore from Rs 10.62 crore.

The reclassification means reported continuing-operations revenue of Rs 54.25 crore for the half year excludes the former friction business. In continuing operations, investment segment revenue was Rs 21.67 crore and commodity-trading revenue was Rs 32.58 crore, compared with Rs 18.64 crore and Rs 10.15 crore, respectively, in the prior-year half year.

What changed in Hindustan Composites’ balance sheet after the sale?

Hindustan Composites reported total assets of Rs 1,501.91 crore at 30 September 2026, compared with Rs 1,264.81 crore at 31 March 2026. Current investments rose to Rs 254.98 crore from Rs 34.06 crore, while non-current investments increased to Rs 1,073.32 crore from Rs 972.05 crore.

Total equity stood at Rs 1,410.23 crore at 30 September 2026, compared with Rs 1,147.40 crore at 31 March 2026. Other equity increased to Rs 1,402.85 crore from Rs 1,140.02 crore, while equity share capital was unchanged at Rs 7.38 crore.

Total liabilities declined to Rs 91.68 crore at 30 September 2026 from Rs 117.41 crore at 31 March 2026. Current tax liabilities were Rs 23.14 crore at the reporting date, compared with Rs 94 lakh at the March year-end, while current borrowings stood at Rs 2.81 crore.

Conclusion

Hindustan Composites’ completed friction-business transfer reshaped its September 2026 results: the Rs 276.77 crore exceptional profit drove reported earnings, while Rs 321.38 crore of net sale proceeds turned half-year investing cash flow positive. The former undertaking is now separately reported as discontinued operations, allowing the continuing investment and commodity-trading activities to be assessed independently.

The next results will show the performance of continuing operations, whose half-year revenue was Rs 54.25 crore and profit before tax before the exceptional item was Rs 6.99 crore. Hindustan Composites also reported Rs 215.36 crore in overnight mutual funds at 30 September 2026, while the filing did not disclose a specific plan for deploying those funds.