Financial Performance Overview
HMT Limited reported mixed financial results for FY 2025-26. On a standalone basis, the company achieved revenue of ₹25.96 crore with net profit of ₹16.69 crore, showing marginal 0.24% growth. However, consolidated performance revealed significant challenges with group net loss of ₹13,154.20 lakhs (₹131.54 crore) and negative net worth of ₹2,38,226.80 lakhs. The group's total assets stood at ₹53,563.50 lakhs against liabilities of ₹2,56,230.14 lakhs, including defaulted government loans of ₹99,024.54 lakhs and accumulated interest of ₹65,956.05 lakhs.
Subsidiary Performance Divergence
Subsidiary performance showed stark contrasts. HMT (International) Limited delivered exceptional results with record order book of ₹149.16 crore, 269% revenue growth to ₹46.43 crore, and execution of major export projects including vehicle supply to Nepal and equipment to Myanmar. Conversely, HMT Machine Tools Limited reported severe losses of ₹148.46 crore with 36% sales decline to ₹70.55 crore, though showing improvement from previous year's ₹160.99 crore loss. The company closed HMT Watches Limited during the year.
Auditor Qualifications and Governance Issues
Auditors GRSM & Associates issued a qualified opinion citing multiple material issues: non-compliance with Ind AS 109 on expected credit losses, inadequate inventory valuation across units, lack of external confirmations for balances, unreconciled GST credits, and delayed statutory payments at subsidiaries. Material weaknesses in internal financial controls were identified group-wide. The company reported SEBI non-compliances including insufficient independent directors, improperly constituted committees, and delayed financial submissions resulting in significant exchange fines.
Going Concern and Government Support
The financial statements are prepared on a going concern basis despite material uncertainty, relying on continued support from the Government of India and expectation of a revival plan. The company has defaulted on principal and interest repayments for government loans with delays ranging from 1,429 to 6,937 days. A revival plan chaired by Dr. V. K. Saraswat of NITI Aayog has been submitted for consideration.
Operational and Legal Challenges
Significant operational challenges include land title issues with multiple properties pending registration, encroachment problems, and assets held for sale worth ₹296.15 lakhs under Supreme Court adjudication. Contingent liabilities totaled ₹36,105.54 lakhs covering tax claims, property disputes, and employee-related matters. Investments in joint ventures and associates remain uncertain with net worth erosion in most cases.
Future Outlook and Strategic Initiatives
Despite current challenges, management sees opportunities in dairy processing equipment supported by government schemes, machine tools market driven by defense and aerospace investments, and watches business leveraging brand heritage. The company continues to pursue strategic initiatives including additive manufacturing technology cooperation and focus on import substitution through indigenization efforts.