Reconstruction is a common feature in today’s era. Many companies join hands to become even stronger. Many companies break their collaboration and make their own separate companies. In this paper we are going to study about the impact of demerger on the financial position of a business. For this we will study the demerger of one of the renowned Indian companies with that of the Japanese company. Hero an Indian Company broke its 26 year old collaboration with Japan based Honda. In this paper we will analyze the trend of financial statement of hero Motocorp in last fifteen years and will discuss their financial position pre and post demerger and thus will try to analyze whether after its breakup is the company able to come up with its challenges?