HMT: Making a switch in time

Three years after shuttering its watch division, the iconic watchmaker HMT (Hindustan Machine Tools) has restarted manufacturing and selling watches online on its website and at the stores located in the HMT building in the city, a top official of the company told DH.

S Girish Kumar, Chairman Managing Director, HMT said, “We are making about Rs 5 crore in terms of revenue from the watches. We are selling it only online. We saw that there was a demand for mechanical and hand-wound watches. We had the technology and the technical knowledge to create these watches and decided to restart it in a small way this year.”

“About 50,000 watches have been manufactured this year. We are looking at 20% growth in the watch division year-on-year. We sell watches in the price range of Rs 600 to more than Rs 20,000,” he added.

The company took the services of ex-HMT watches employees, who were hired on a contract basis for the concerned project.

The revival of the watch division mirrors the upswing in the fortunes of the company in the past few years. The HMT group and its subsidiaries make tractors, printing machinery, die casting and plastic processing machinery. After two decades of making losses, the group is finally getting back into the black. This year the group clocked a profit of Rs 25 crore and touched the revenue mark of Rs 300 crore. With a consolidation plan in place, the HMT group is looking to touch the Rs 1,200 crore mark in revenue in the next three years.

Looking back

Hindustan Machine Tools was incorporated in 1953 by the Central government as a machine tool manufacturing company. Over the years, HMT diversified into a range of products manufacturing watches, tractors, printing machinery, metal forming processes, and CNC systems and bearings. Presently, HMT consists of six subsidiaries under the ambit of a holding company, which also manages the tractor business directly.

Set up in the early 1960s, the watch division of the company sold more than a crore watches in five decades, before finally shuttering up in 2016. HMT has manufactured and sold over 1.1 crore watches to date, in more than 2000 models.

The financials

According to the company’s annual report, the total turnover in 2018-19 stood at Rs 19.60 crore against Rs 14.77 crore (excluding excise duty) a year ago. The profit before tax stood at Rs 25.66 crore from Rs 3.67 crore in the previous year. The HMT Group along with its subsidiaries achieved an aggregate production of Rs 255.84 crore. It also states that the authorised share capital of the company stood at Rs 2,100 crore and paid-up equity share capital is Rs 355.60 crore.

Kumar explains, “While the net profit of HMT Limited is Rs 25 crore, the net profit of HMT International is at Rs 2 crore. Meanwhile, HMT Machine Tools has made an operational profit of Rs 14 crore. However, it was the first time in 20 years that we are seeing an uptick in net profit. We are confident that HMT Machine Tools will also be back in the black soon.”

The path to revival

The company is presently involved in multiple projects, most of them in association with The Defence Research and Development Organisation (DRDO) and the Indian Space Research Organisation (ISRO). The company also had a small part to play in the Chandrayaan 2 project, with the solid rocket motors of the launch vehicle machined on the 3-Axis CNC vertical facing mill machine supplied by HMT’s Hyderabad unit. Meanwhile, the Kochi Unit has been associated with the assembly of GSLV vehicle control system components at ISRO’s GOCO Centre, which was used in Chandrayaan 2 as well.

Kumar adds, “We are also working on many projects with the Indian Railways, including collaboration with other state-run units such as the Rail Wheel Factory in Yelahanka. We are also working on manufacturing CNC engines.”

The company has also added a CNC (Computer Numerical Control) vertical machining centre and CNC Lathe to its manufacturing facility. Kumar says, “One of the major reasons for this revival is the fact that we trimmed down and began to focus only on core areas, making our workforce more efficient and productive. We have a small workforce and have cut down on all non-essential expenditure that has helped us meet our targets.”

Another interesting facet about HMT is the museum that the company has set up on its premises in Bellary road. Kumar says, “It showcases the evolution of watch technology over the years, and shows the growth trajectory from hand-wound watches to automatic, quartz watches and so on. There are exhibits of different types of HMT watches and some insights on tractor technology, bearings and so on.”