HMT - HMT

📊 NSE: HMT 🏢 Engineering 📅 Last Updated: 12/14/2025 7:47

💰 Financial Performance

Revenue Growth by Segment

Consolidated revenue for three subsidiaries reached INR 61.25 Cr for the half-year ended September 30, 2025. Standalone total income from continuing operations was INR 13.35 Cr for the same period, representing a significant decline from historical levels such as the INR 45.4 Cr reported in FY16, which itself was a 24.5% drop from FY15 revenue of INR 60.2 Cr.

Geographic Revenue Split

Not disclosed in available documents, though the company operates through HMT (International) Ltd for global markets.

Profitability Margins

Standalone operating profit margin increased to 75.39% in FY25 from 36.46% in FY24, primarily due to a reduction in sales volume and cost rationalization. Net profit margin stood at 61.53% in FY25, down from 50.98% in FY24, impacted by the reversal of income tax provisions in the previous year.

EBITDA Margin

Not explicitly disclosed as EBITDA, but the company reported a consolidated net loss of INR 80.20 Cr for its three subsidiaries for H1 FY26. Standalone cash loss was INR 132.3 Cr in 9MFY17, showing a history of deep operational deficits.

Capital Expenditure

Historical capital expenditure included a GOI-approved revival plan of INR 1,083.48 Cr in 2013. Recent cash flow statements for H1 FY26 show minimal purchase of property, plant, and equipment (INR 0.01 Cr), reflecting a focus on divestment rather than expansion.

Credit Rating & Borrowing

Ratings were withdrawn by CARE in October 2017 following the settlement of bank debt. Previously, the company held a 'CARE B-' rating. Borrowings as of September 30, 2025, stood at INR 1,028.59 Cr, with finance costs for the half-year at INR 2.60 Cr, a 92% reduction from INR 33.06 Cr in the previous year's period.

⚙️ Operational Drivers

Raw Materials

Steel, electronic components for CNC systems, and castings (specific % of total cost not disclosed).

Capacity Expansion

No expansion planned; the company is currently in a phase of contraction and closure. Three subsidiaries (Watches, Chinar Watches, and Bearings) and the Tractor division have been closed to mitigate losses.

Raw Material Costs

Not disclosed as a specific percentage of revenue, but overall personnel costs are being managed through a reduction in workforce to 618 total employees as of March 2025.

Manufacturing Efficiency

Capacity utilization is not specified, but the company is rationalizing surplus manpower and implementing austerity measures to lower the break-even point.

📈 Strategic Growth

Expected Growth Rate

Growth Strategy

The company is not pursuing a growth strategy but rather a 'Revival and Financial Restructuring Plan' focused on closing loss-making subsidiaries (Watches, Bearings) and divisions (Tractors) to discharge liabilities. Future viability depends on the realisable value of non-current assets held for sale and continued funding from the Government of India.

Products & Services

Machine tools, printing machinery, metal forming presses, die casting plastic processing machinery, and CNC systems.

Brand Portfolio

HMT

New Products/Services

Not disclosed; focus is on existing machine tool contracts and international trade via HMT (International) Ltd.

Market Expansion

No expansion; the company is consolidating operations to Bengaluru and specific subsidiary locations.

Market Share & Ranking

Not disclosed; significantly diminished following the exit from the tractor and consumer watch markets.

Strategic Alliances

Maintains a Joint Venture with total assets of INR 0.39 Cr, which reported a marginal loss of INR 0.0071 Cr in H1 FY26.

🌍 External Factors

Industry Trends

The machine tools industry is shifting toward high-precision CNC systems; however, HMT's positioning is weakened by its negative net worth of INR 1,966.34 Cr, which limits its ability to invest in new technology shifts.

Competitive Landscape

Faces competition from private sector machine tool manufacturers and importers, though specific competitors are not named.

Competitive Moat

The primary moat is 'Sovereign Support' from the Government of India. This is sustainable only as long as the GOI continues to provide interest-free loans and grants to discharge liabilities, as the company's net worth is completely eroded.

Macro Economic Sensitivity

Highly sensitive to government policy and fiscal support, as the GOI provided INR 718.7 Cr in 2016 specifically to settle tractor division liabilities.

Consumer Behavior

Shift away from mechanical watches and older tractor models led to the total closure of those divisions.

Geopolitical Risks

Exposure via HMT (International) Ltd, though specific trade barrier impacts are not quantified.

⚖️ Regulatory & Governance

Industry Regulations

Subject to Department of Heavy Industry (DHI) guidelines and CCEA (Cabinet Committee on Economic Affairs) approvals for the closure of units and financial restructuring.

Taxation Policy Impact

The company benefited from a reversal of income tax provisions in FY24, which significantly impacted net profit margins.

Legal Contingencies

The company was fined INR 0.06 Cr (INR 6,08,880) by both BSE and NSE for non-compliance with SEBI regulations regarding the composition of the Board and Audit Committee. It is also dealing with the write-off of INR 11.97 Cr in bad debts related to inter-subsidiary loans.

⚠️ Risk Analysis

Key Uncertainties

The complete erosion of net worth (Negative INR 1,966.34 Cr) creates a material uncertainty regarding the 'Going Concern' status, which is currently mitigated only by government support.