Hindustan Composites Limited — Important, 30-06-2026: Disclosure of material issue

Hindustan Composites (#HINDCOMPOS) has announced its board approved the sale of its 'Friction Business Undertaking' to Rane (Madras) Ltd for 370 Cr cash.

**Issue:** This business segment is huge for HINDCOMPOS, contributing 84% of its FY26 turnover (315.04 Cr) and 7.50% of its net worth (69.52 Cr). This is a major divestment that will significantly alter the company's revenue profile.

**Possible Impact:**

* Company's revenue base will shrink drastically post-sale.

* Cash infusion of 370 Cr will strengthen the balance sheet.

* Potential for a special dividend for shareholders.

* Focus will shift to its remaining businesses: Treasury & Investment, and Commodity Trading.

**Company's Response/Mitigation:**

* **Strategic move:** Aims to unlock embedded value, streamline portfolio, and enhance shareholder value.

* **Cash deployment:** Proceeds will fund future investments, with a *portion expected to be returned to shareholders via a special dividend*.

* **Operational benefits:** Avoids significant future capital expenditure for the friction business, expected to be EPS-accretive, and leads to a more predictable earnings profile by reducing exposure to a capital-intensive segment.

* **Next Step:** The sale requires shareholder approval via Postal Ballot and is expected to complete by September 30, 2026.