Hindustan Composites Limited reported a consolidated profit after tax of ₹8.68 crore for the quarter ended June 30, 2026, marking a 16% year-on-year increase from ₹7.46 crore in Q1FY26. The Mumbai-based manufacturer’s revenue from operations rose to ₹2,005 lakh from ₹1,462 lakh in the corresponding period of FY25. This performance is largely underpinned by its core friction business, which has been classified as discontinued operations following a proposed slump sale to Rane (Madras) Limited for ₹370 crore. The transaction represents a significant strategic shift for the company, with shareholders set to vote on the deal at the upcoming Annual General Meeting.

The Board of Directors approved the unaudited standalone and consolidated financial results at a meeting held on July 23, 2026. The results were reviewed by the Audit Committee and subjected to a limited review by the Statutory Auditors, M/s. Lodha & Co. LLP. In addition to the financial results, the Board recommended the appointment of M/s. R M Mimani & Associates LLP as Secretarial Auditors for five consecutive years, effective from FY27 to FY31, subject to shareholder approval at the 62nd Annual General Meeting scheduled for September 29, 2026. The dividend for FY26, if approved, will be paid between October 1, 2026, and October 15, 2026.

Financial Performance

For Q1FY27, Hindustan Composites recorded revenue from operations of ₹2,005 lakh in both standalone and consolidated statements. Profit before tax from continuing operations stood at ₹158 lakh, lower than ₹220 lakh in Q1FY26 but higher than ₹144 lakh in Q4FY26. Total comprehensive income after tax reached ₹2,860 lakh, significantly boosted by other comprehensive income items related to investment assets. The key financial metrics are detailed below:

Discontinued operations contributed ₹675 lakh to the post-tax profit in Q1FY27, compared to ₹959 lakh in Q4FY26 and ₹592 lakh in Q1FY26. The friction business segment generated revenue of ₹8,553 lakh and reported a profit before tax of ₹821 lakh during the quarter.

Strategic Restructuring

A material development disclosed in the filing is the proposed transfer of the 'Friction Business Undertaking' to Rane (Madras) Limited. The Board approved this slump sale on June 30, 2026, for a lump sum cash consideration of ₹370 crore. The transaction includes all relevant assets, liabilities, contracts, and licenses related to the development, manufacturing, and marketing of friction materials for automobile, railway, and industrial applications. The sale is subject to shareholder approval under Section 180(1)(a) of the Companies Act, 2013, and Regulation 37A of the SEBI Listing Regulations.

Consequently, the friction business has been reclassified as discontinued operations in the financial statements, with comparative periods restated accordingly. The lump sum consideration is subject to transaction adjustments as per the Business Transfer Agreement.

What the Numbers Show

The financial data reveals a distinct bifurcation in the company's operational profile. While continuing operations—primarily investment and commodity trading—generated modest profits of ₹193 lakh, the discontinued friction business contributed ₹675 lakh to the post-tax bottom line. This indicates that the core industrial manufacturing segment remains the primary profit driver, despite its classification as discontinued due to the pending sale. The investment segment assets grew to ₹115,751 lakh, suggesting a shift in capital allocation towards financial instruments as the industrial asset base prepares for divestment. Additionally, the company continues to recognize no share of losses from its joint venture, Compo Advics (India) Private Limited, as the accumulated losses have exceeded the investment value since June 2021.

M/s. MR & Associates has resigned as the secretarial auditor of hindustan composites effective July 10, 2026, due to logistical challenges arising from the distance between the firm's office in Kolkata and the company's registered office in Mumbai. The resignation, which impacts the governance oversight of the company, was communicated to the stock exchanges on July 10, 2026, at 11.52 a.m.

The firm, which was appointed for a term of five consecutive years starting from the financial year 2025-26, submitted its resignation letter citing the geographical separation as the primary reason for stepping down. The disclosure was made under Regulation 30 read with Part A of Schedule III of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Details of Resignation

The following table outlines the key particulars of the change in the secretarial auditor position:

The company has enclosed the resignation letter and the necessary disclosures as Annexure A to the filing. The resignation was formally signed by Cs Mohan Ram Goenka, Partner at MR & Associates. Hindustan Composites Limited is required to complete the necessary formalities under the Companies Act, 2013, and the SEBI Listing Regulations to appoint a successor.