📌 At a Glance
HMT Ltd is a legendary PSU with a tragic millennial reboot story. Once India’s pride in watches and tools, it’s now mostly a zombie entity with huge losses, negative net worth, and barely any sales – but hey, it’s rallied 3x from 2020 lows because… PSU + nostalgia?
1. 🧩 WTF Do They Even Do?
HMT Ltd is the holding company for:
- HMT Machine Tools Ltd – The only active business, making CNC lathes, transfer lines, etc.
- Ex-watches division – Was shut down in 2016.
- Tractors & Bearings – Also shut or sold.
- Other drama – A mix of land, export servicing, food processing equipment, and dreams.
🎯 Business mix:
| Segment | % of Revenue (FY24) |
|---|---|
| Machine Tools | ~81% |
| Food machinery, etc. | ~19% (likely job-work, legacy ops) |
But here’s the kicker: FY24 full-year sales = ₹151 Cr, while expenses = ₹258 Cr. Classic PSU math.
2. 📊 Financials – Profit? What’s That?
Let’s look at how bad it gets.
🧨 5-Year Snapshot:
| Metric | FY20 | FY21 | FY22 | FY23 | FY24 |
|---|---|---|---|---|---|
| Revenue (₹ Cr) | 260 | 204 | 176 | 204 | 151 |
| Operating Profit (₹ Cr) | -39 | -70 | -85 | -94 | -107 |
| Net Profit (₹ Cr) | 156* | -110 | 533* | -123 | 2,551* |
| OPM (%) | -15% | -35% | -49% | -46% | -70% |
*Profits boosted by Other Income (govt grants, asset sales, etc). Not operational.
🛑 Operating business = consistently bleeding.
3. 💸 Valuation – Is It Cheap or Just Cheating?
- Market Cap: ₹2,295 Cr
- Book Value: -₹50.8 per share 🤯
- P/E: N/A (because operating profits don’t exist)
Let’s assume the market is betting on:
- Asset monetization (real estate? PSU divestment?)
- Revival of manufacturing (not happening since 2005)
- Speculative PSU rally
Fair value? Honestly, a hard-to-model beast. But for kicks:
🧮 FV Range: ₹20–25 (based purely on liquidation potential)
Why?
- Business value: NIL (loss-making)
- Land/assets: Unclear (Govt owns most)
- Only upside: If GoI sells land or merges with something valuable.
4. 🔍 What’s Cooking?
🥁 Q4FY24: Net Profit ₹2,551 Cr.
No, it wasn’t from selling lathes to China.
It was a one-off accounting entry – likely from:
- Asset revaluation
- Write-backs or settlements
- PSU-era magical bookkeeping
Also:
- 🧾 Fined ₹14.04 lakh by BSE & NSE for SEBI LODR non-compliance.
- 🧑💼 CMD Rajesh Kohli’s term extended till 2026.
- 🤐 Zero public communication on revival roadmap.
5. 🧾 Balance Sheet – How Much Debt, How Many Dreams?
| Item | FY24 |
|---|---|
| Borrowings | ₹1,062 Cr |
| Reserves | -₹2,163 Cr |
| Networth | Deeply negative |
| Fixed Assets | ₹36 Cr |
| Inventory Days | 585 days 😭 |
| Debtor Days | 299 days 🧟 |
6. 💰 Cash Flow – Sab Doob Raha Hai
| Year | CFO (₹ Cr) |
|---|---|
| FY23 | ₹103 Cr (odd jump) |
| FY24 | -₹847 Cr |
Either someone forgot to switch off the cash leak, or a large write-down happened.
7. 📉 Ratios – Stress Test Fail
- ROE / ROCE: Negative (forever)
- Interest Coverage: < 1
- Working Capital Days: -2,173
- OPM: -70%
Even ChatGPT’s calculator cried while processing this.
8. 📦 P&L Breakdown
FY24:
| Line Item | Amount (₹ Cr) |
|---|---|
| Sales | 151 |
| Expenses | 258 |
| Operating Loss | -107 |
| Other Income | 2,714 |
| Net Profit | 2,534 |
Remove “Other Income” and the stock becomes a literal rusted lathe.
9. 🏁 Peer Comparison – Not Even the Same League
| Company | Sales (₹ Cr) | OPM (%) | P/E | ROE (%) | Market Cap (₹ Cr) |
|---|---|---|---|---|---|
| HMT | 151 | -70% | N/A | N/A | 2,295 |
| Kaynes Tech | 2,722 | 15% | 141 | 11% | 41,370 |
| Jyoti CNC | 1,818 | 27% | 72 | 21% | 23,273 |
| LMW | 3,012 | 4.7% | 215 | 3% | 17,908 |
🥴 HMT looks more like a “listed relic” than a business.
10. 🧾 Misc – Shareholding, Promoter Gyaan
- Promoters (Govt of India): 93.69%
- Public: 0.71%
- No. of shareholders: 27,000+
- Most are retail traders hoping for a “PSU rerating” or land sale.
🧠 EduInvesting Verdict™
HMT Ltd is a financial hallucination held up by nostalgia and one-off accounting.
Would we buy this company for ₹2,000 Cr in real life?
👉 No.
Is it a great speculative play during PSU euphoria?
👉 Maybe. But only if you also invest in UFO sightings and time travel.
💥 Verdict: “Price up 3x, Business down the drain. PSU Mungerilal in action.”
✍️ Written by Prashant | 📅 3 July 2025
Tags: HMT Ltd, PSU Stocks, Machine Tools, Loss-Making PSUs, Value Trap, Asset Monetization, EduInvesting
