HMT Ltd Management Discussions

GLOBAL ECONOMIC ENVIRONMENT

The global dairy-processing-equipment market is
experiencing steady, mid-single-digit growth as rising
demand for value-added dairy products, expanding
cold-chain infrastructure and modernization
of processing lines drive capital expenditure
across regions. Automation, IoT integration and
sustainability (energy-efficient pasteurization and
waste-reduction systems) are the principal near-
term growth enablers, while trade-policy shifts and
supply-chain re-routing shape regional investment
patterns.

INDUSTRY STRUCTURE AND DEVELOPMENT

The industry is broadly bifurcated between a
handful of global system integrators and OEMs that
dominate premium, full-line turnkey solutions (e.g.,
packaging, membrane filtration and automated
metering) and a large base of regional and local
suppliers that compete on cost, customization
and after-sales support. Large players continue
to invest in R&D and digital services, accelerating
consolidation at the top end, while domestic
manufacturers (including Indian capital-goods firms)
focus on import substitution, modular systems
and service networks to win smaller plants and
emerging-market contracts. Recent development
trends emphasize modular, scalable processing
blocks, cloud-enabled performance monitoring, and
partnerships between equipment makers, dairy co-
operatives and financing agencies to lower adoption
barriers for SMEs.

OUTLOOK OF DAIRY MACHINERY INDUSTRY
IN INDIA

The dairy industry in India is the largest globally,
accounting for 23% of global milk production.
The nations milk production increased at a CAGR
6.2% from 146.31 million tonnes in 2014-15 to
209.96 million tonnes in 2020-21. The Indian
dairy machinery market is projected to see strong
growth in the coming years, driven by increased

milk production and processing and the adoption of
advanced technologies.

According to a report of Expert Market Research,
the Indian dairy machinery market is expected to
reach INR 57001 Billion by 2033, with a CAGR of
12.35% between 2025 and 2033.

The Indian Government is implementing several
schemes and policies to boost the dairy sector,
focusing on infrastructure development & quality
improvement. Dairy Processing and Infrastructure
Development Fund is aimed to modernizing milk
and milk product processing plants and machineries.

Future outlook of the dairy machineries in India
looks promising, with strong growth projected due
to increasing demand, technological advancements
and government support.

NEW OPPORTUNITIES

The Food Processing Machinery Division (FPA) at
Aurangabad is well-positioned to capitalize on the
rapid expansion of Indias food-processing industry,
which is projected to grow from USD 3.10 billion
in 2022 to USD 4.57 billion by 2030 at a 5 percent
CAGR. Rising consumer demand for processed
dairy, beverage and convenience foods, coupled
with stricter food-safety and quality regulations, is
driving investment in turnkey plant solutions and
advanced equipment such as homogenizers, plate
heat exchangers and continuous butter-making
machines. Government financing schemes most
notably the Dairy Processing & Infrastructure
Development Fund (DIDF) and the Animal Husbandry
Infrastructure Development Fund (AHIDF) offer low-
interest credit for installing pasteurizers, separators
and cold-chain systems, further de-risking capex
and improving access for both cooperatives and
private processors. Moreover, emerging export
opportunities in South Asia and Africa, evidenced by
turnkey dairy projects (e.g., the Khulna, Bangladesh
facility), provide a ready market for Aurangabads
turnkey and OEM offerings under the HMT banner.

CHALLENGES

Despite these opportunities, FPA unit faces
significant challenges. The global food-processing
machinery space is increasingly competitive, with
established players such as Alfa Laval, GEA and SPX
capturing premium segments and exerting pricing
pressure on domestic manufacturers. A persistent
shortage of technically skilled operators and
service engineers essential for commissioning and
maintaining hi-tech equipment risks undermining
customer satisfaction and limiting aftermarket
revenues. Additionally, the Unit must navigate raw-
material price volatility (stainless steel, alloyed
components) and intermittent supply-chain
disruptions, which can inflate manufacturing costs
and extend delivery lead times. Finally, evolving
environmental and safety regulations demand
continuous investment in cleaner, more energy-
efficient machinery necessitating sustained R&D
spending at a time when financing remains tightly
constrained.

RISKS & CONCERNS

Despite the positive outlook, the sector faces
several concerns that could temper growth. Price
volatility of raw milk remains a persistent risk,
as fluctuations in procurement prices can make
it difficult for processors to predict margins and
justify capital expenditures on new equipment.
Supply-chain disruptions, whether due to logistical
bottlenecks or shortages of spare parts, can further
exacerbate operational uncertainties. Additionally,
the high capital intensity associated with advanced
dairy machinery poses financing hurdles for smaller
cooperatives and private processors, who often
lack access to favorable credit terms. Compounding
these issues, a shortage of skilled technicians at
the farm level can slow the adoption of automated
systems, thereby limiting the efficiency gains that
modern equipment would otherwise deliver.

SEGMENT WISE / PRODUCT WISE PERFORMANCE

Food Processing Equipment

i) SS Centrifugal Pumps: Well-accepted in the

market, but due to higher cost business is low.

ii) Cream Separators: Very good market for cream
separators with capacity 1 kl & 2 kl. But it could
not sustain in the market for higher capacity
separator i.e. 5 kl, 10 kl & 20 kl due to its
performance problem.

iii) Homogeniser: Homogeniser with capacity of 1
kl & 2 kl well accepted in the market but 3 kl &
5kl, homogenizer is having less business.

iv) Milk Pasteurizer/Chiller: Due to the non-
availability of CLIP-ON type gaskets, we are
out of competition. Even after purchasing PHE
plates with CLIP ON type gasket, our prices
are very high due to our overheads. Hence,
business for Milk Pasteurizers/chillers is very
low.

v) Strong market demand has been identified for
Continuous Butter Making Machine, particularly
for the production of white butter used in
ghee manufacturing. The machine performs
efficiently and reliably in this segment. While
our current model is optimized for white butter,
imported variants also offer the flexibility to
handle both white and salted butter, presenting
an opportunity for future enhancement based
on market needs

Watches

vi) Automatic Day Date models: Well-accepted
in the market because of design aesthetics.
Increase in sales need more marketing efforts.

vii) Quartz: Very good market for quartz watches as
the price range of HMT Watches is attractive.

viii) Hand wound Mechanical watches: Well-

accepted in the market, but due to unavailability
of components, production of hand wound
mechanical watches are limited.

FINANCIAL PERFORMANCE

The turnover of the Company for the year 2024-25

was Rs.26.17 crore with net profit of Rs.16.10 Crore.

Turnover decreased from Rs.36.05 crore for the

previous year to Rs.11.34 crore during current year

in respect of Food Processing Machinery Division,
Aurangabad, which is mainly on account of Revenue
from Powder project during the previous year.

The total borrowing (loan) of the Company from
Government of India were Rs.641.72 crore as on
31.3.2025.

RATIO ANALYSIS

	2024-25	2023-24
Trade Receivables Turnover Ratio	1.87	2.92
Inventory Turnover Ratio	2.16	4.46
Interest Coverage Ratio	24.97	Nil
Current Ratio	0.78	0.76
Debt Equity Ratio	1.43	1.48
Operating Profit Margin (%)	75.39%	36.46%
Net Profit Margin (%)	61.53%	50.98%
Return on Net Worth	0.03	0.05

Trade Receivables Turnover has decreased due to
reduction in Turnover on account of revenue from
powder project in the previous year.

Inventory Turnover has decreased due to reduction
in turnover on account of revenue from powder
project in the previous year.

Interest coverage ratio due Interest on borrowings
during the year.

Current ratio has increased due to increase in
Current Assets on account of loan provided to HMT
Machine Tools Ltd. during the year.

Debt equity ratio decreased due to increase in Total
Equity on account profit earned during the year.

Operating profit margin increased due to reduction
in sales.

The decrease in Net Profit Margin is mainly due to
decrease in Net profit during the year on account
of the reversal of income tax provision during the
previous year.

Decrease in return on Net worth is due to decrease
in PAT on account of the reversal of income tax
provision during the previous year.

INTERNAL CONTROL SYSTEMS AND THEIR
ADEQUACY

The Company has in place adequate systems of
Internal control commensurate with its size and
nature of its operations. The salient features of
internal control systems are

i) Clear delegation of power with authority limits
for incurring capital and revenue expenditure.

ii) Well laid down corporate policies for accounting,
reporting and Corporate Governance.

iii) Safeguarding assets against unauthorized use
or losses or disposition, and ensuring that
the transactions are authorized, recorded and
reported correctly.

iv) Process for formulating and reviewing annual
and long term business plans have been laid
down.

v) Detailed Annual budget giving further break up
of monthly targets under various heads.

vi) Continuous review of the performance by the
Core Committee with reference to the budgets
on an ongoing basis.

vii) Compliance with laws and regulations.

The Internal Audit Department of the Company
along with the external firms appointed for carrying
out internal audits of Units / Divisions reviews,
evaluates and appraises the various systems and
procedures / policies laid down by the Company and
suggests meaningful and useful improvements.

Internal Audit Department coordinates with the Units
/ Divisions of the company to ensure coverage of all
areas of operations in order to bring a transparency
in the whole spectrum of the Company.

The Audit Committee reviews the Audit Report
submitted by the Internal Auditors. Suggestions
for improvement are considered and the Audit
Committee follows up on the implementation of
corrective actions.

The Audit Committee also discusses with the
Companys statutory Auditors to ascertain, inter-
alia, their views on the adequacy of internal control
system in the Company and keeps the Board of
Directors informed of its major observations from
time to time.

HUMAN RESOURCES

As on 31.03.2025, the Company and its Subsidiaries
had a total workforce of 618 employees, comprising
various categories of employees in manufacturing
plants and other offices in technical and other
professional areas as detailed below.

COMPANY AND SUBSIDIARY WISE QUALIFICATION DETAILS AS ON 31.03.2025
Sl Company and No Subsidiary	IP as on 31.03.2025	Engineering Graduates	Diploma Holders	Professionals		ITI/ NAC	General Graduates/Post Graduates	Others
				HR	Finance
1 HMT Limited	45	13	4	5	2	4	16	1
HMT Machine Tools 2 Ltd	559	90	103	4	7	259	38	58
3 HMT (International) 3 Ltd	14	11	0	1	1	0	1	0
Total	618	114	107	10	10	263	55	59

The Company has taken suitable measures to bring
down the Personnel Costs by implementing several
austerity measures, rationalization of surplus
manpower in the Company.

Statistics on the number of employees separated on
availing the VR Scheme in HMT and its Subsidiary
Companies during the last four years is NIL.

Surplus manpower in certain areas has been
deployed under re-deployment scheme by

providing training and re-training to the employees
and posting them at thrust areas to meet the goals
of the organization. The Company is trying its best
to retain the skilled and professionally qualified
personnel to arrest attrition.

PERSONNEL AND INDUSTRIAL RELATIONS

The Personnel and Industrial Relations situation in
the Company during the year, remained cordial.

For and on behalf of the Board of Directors

	Sd/-
	(Rajesh Kohli)
Place: Bengaluru	Chairman & Managing Director
Date: 29.09.2025	(Addl. Charge)
	DIN:10333951