HMT Limited is a government-owned engineering company that was born in 1953 to build the “mother machines” that would industrialise an independent India - and it is now being deliberately shrunk from a sprawling conglomerate into a focused maker of high-tech capital goods and a strategic partner for defence and atomic energy. Over the past decade, the government has closed its watches, bearings and tractor factories, leaving a leaner group of 618 people that still operates on the same principle: design and build precision machinery that the country would otherwise have to import, often at half the foreign price. # Business segments Three engines at different stages - a specialised machine-tools subsidiary that supplies the strategic sector, a dairy-equipment unit rebuilding itself around turnkey projects, and a small watch-assembly and spares business that keeps the HMT name on the high street - each a remnant of a once-vast public-sector empire. ## 1. Machine tools: the mother machines for India’s strategic industries **A wholly owned subsidiary designs and builds complex, import-substitute CNC machines and nuclear-plant manipulators, selling them to defence, railways and atomic-research customers at roughly half the cost of the foreign alternative.** - **Half-price import substitutes** - the subsidiary has repeatedly developed machines that replace imported equipment, such as a Twin Head CNC Heavy Duty Grinding Machine for railway axles (previously bought from Spain) and a surface wheel lathe that saves 30% over the single existing supplier, both built at about half the imported price. - **Nuclear-plant robotics** - it supplies specialised manipulators to Bhabha Atomic Research Centre (BARC) and the Indira Gandhi Centre for Atomic Research, including 39 pairs of Three-Piece Manipulators and a spent-fuel chopper for disposing of nuclear fuel, work that demands extreme precision and security clearance. - **Built with academic brains** - product development is done in collaboration with IIT-BHU, IISc Bengaluru and the ARTPARK robotics initiative, and the subsidiary has launched a cloud-based platform called HMT I-Connect that gives customers centralised visibility into their CNC machines’ performance. - **Imported innards** - roughly 40% of the value of its machines comes from imported components - CNC controllers, spindle bearings and linear-motion guides - for which there are no domestic manufacturers, creating a permanent dependence on foreign supply chains. - **Customers with long planning cycles** - buyers include ordnance factories, naval procurement, state skill-development authorities (62 machines to Odisha alone) and a defence company in Europe, a customer base where orders are large but infrequent and specifications are exacting. ## 2. Food processing machinery: turnkey dairy plants from a single factory **The Aurangabad unit designs and installs complete dairy processing plants - up to 50,000 litres a day - and makes the pumps, separators and homogenisers inside them, competing against global giants on a fixed-cost project basis.** - **Turnkey projects are the main event** - the division does not just sell machines; it bids for entire dairy-plant contracts covering supply, installation, commissioning and trial runs, with its largest-ever order being a Rs. 67 Crore milk-powder plant in Indore - its first entry into a segment it estimates is worth Rs. 400 Crores nationally. - **A monopoly product with a limitation** - its Continuous Butter Making Machine is described as a monopoly, but it can only produce white butter for ghee, whereas imported machines offer both white and salted-butter options, so the division is now developing a salted-butter version. - **Technology frozen in 1980** - the core dairy technology comes from a technical collaboration with an East German firm, Fortschritt Landmaschinen, signed in 1980, and the company is now looking for a new joint-working arrangement to upgrade it against competitors like Alfa Laval, GEA and SPX. - **Fixed-cost risk on volatile steel** - projects are priced on a fixed-cost basis, but stainless steel - the key raw material - has been highly volatile, squeezing margins in a business where the typical operating margin is only 4-5% and customers take more than 100 days to pay. - **Riding India’s milk boom** - demand is pulled by India’s position as the world’s largest milk producer (209.96 million tonnes in 2020-21, growing at 5.81% annually) and by government schemes that offer low-interest credit to dairy cooperatives for equipment purchases. ## 3. Watches and tractor spares: the brand’s high-street remnant **A small in-house division assembles HMT-branded watches from outsourced components and sells tractor spare parts, keeping a beloved name alive in a B2C market where quartz watches priced between Rs. 650 and Rs. 3,500 are the main draw.** - **Assembly, not manufacture** - the division set up a watch assembly line in December 2020 after obtaining an industrial licence, designing new models and clocks by outsourcing components and performing assembly in-house, since the original watch factory was closed by government decision in 2016. - **Quartz leads the range** - quartz watches sell well because the price band is attractive, while hand-wound mechanical watches are well-accepted but production is limited by component shortages, and the company is planning to add ladies’ quartz watches with new designs. - **A growing slice of a small pie** - the watch business’s contribution to HMT Limited’s turnover rose from 14% in FY23 to 25% in FY24, driven by the appointment of distributors and the launch of themed series such as the AMRUT collection for the 75th Independence Day. # Group structure and partners **HMT Limited is the listed holding company, 78.62% owned by the President of India, with two active wholly owned subsidiaries - one for machine tools and one for exports - while its shuttered watch, bearings and tractor businesses have been formally dissolved or transferred.** - **The closed legacy** - HMT Watches Limited’s operations have been closed and closure activities are under process, HMT Chinar Watches Limited was dissolved under the Insolvency & Bankruptcy Code in March 2022, HMT Bearings Limited was dissolved in April 2022, and the Tractor Division’s plant and township at Pinjore were transferred to the Auxiliary Business Division after closure in March 2020. - **Dormant joint ventures** - SUDMO-HMT Process Engineers (India) Limited, a 50:50 joint venture, has transacted no business for at least six consecutive years, and Gujarat State Machine Tools Corporation Limited, an associate with a 39.86% stake, has long discontinued operations and is now moving through liquidation.