HMT standalone profit masks ₹131.54 cr loss, auditors flag going concern
Auditors issued a qualified opinion on FY26 results, citing material accounting lapses. Consolidated net worth remains deeply negative at ₹2,02,667 lakhs, and the group relies on government support to continue as a going concern.
— 2 earlier stories on HMT Ltd. →What's new
- Statutory auditors gave a qualified opinion on FY26 accounts, citing Ind AS 109 non-compliance and unreconciled GST.
- Group net worth remains deeply negative at ₹2,02,667 lakhs, with total borrowings over ₹1,033 cr.
- HMT Watches Ltd, whose operations were closed earlier, struck off by ROC on March 2, 2026.
Why this matters
The results confirm HMT's financial distress. The qualified opinion and going concern emphasis confirm that the company survives only through government support. For a stock trading on asset value and speculation, these numbers offer limited new information but reinforce the existing narrative of deep structural problems.
What we're watching
- Whether government support continues and in what form.
- Any follow-up on the audit qualifications – especially Ind AS 109 compliance.
- Resolution or formal closure of HMT Watches after being struck off.
The full read
HMT's standalone profit of ₹16.69 crore for FY2026 sounds like a turnaround until you read the consolidated numbers. The group posted a net loss of ₹131.54 crore. Net worth is still deeply negative at ₹2,02,667 lakhs, and total borrowings exceed ₹1,033 crore. The auditors, GRSM & Associates, didn't just sign off. They issued a qualified opinion citing a laundry list of accounting gaps: no expected credit loss model, unreconciled GST credits, inventory not marked to Ind AS 2, and missing confirmations for receivables and payables. They also flagged the going concern reliance on government support. Meanwhile, HMT Watches, already closed, was struck off. The results are routine for a company that survives on state backing. Nothing here changes the investment case, which has always been a bet on asset value and government willingness to keep the lights on.
Questions answered
- What did the auditors qualify on?
- Auditors cited multiple material issues: no expected credit loss model under Ind AS 109, lack of external confirmations for trade receivables/payables, inventory valuation not per Ind AS 2, and unreconciled GST input tax credit. They also emphasized going concern uncertainty due to complete erosion of net worth.
- Why did HMT report a standalone profit of ₹16.69 cr but a consolidated loss of ₹131.54 cr?
- The standalone profit was driven mainly by other income, likely from non-operating sources. The consolidated loss includes the heavy losses of subsidiaries, particularly HMT Watches and other group entities, pulling the group deep into the red.
- What is HMT's net worth position?
- Consolidated net worth stood at negative ₹2,02,667 lakhs as of March 31, 2026. The group has been net worth negative for years, relying on government support to stay afloat.
- What happened to HMT Watches?
- HMT Watches Ltd, the watch-making subsidiary whose operations were already closed, was struck off by the Registrar of Companies on March 2, 2026. This effectively dissolves the entity.
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All notes on HMT →- 27 Jul 2026 · 7:20 PM IST HMT standalone profit masks ₹131.54 cr loss, auditors flag going concern
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