HMT Watches : How India’s Timekeepers Lost The Track Of Time

 HMT Watches : How India’s Timekeepers Lost The Track Of Time

A strategic and financial story of HMT Watches — from national symbol to monopoly to the company that died twice, a decade apart

14Registrar of Companies. Section 248(2).  Routine language. A company struck off the register for having no operations.

Almost nobody noticed. Why would they? Everyone already thought HMT Watches had died ten years earlier.

That's the strange thing about this story, it has two endings, a decade apart, and the real one is the one nobody wrote about.

I want to tell you about a watch company. Not because watches are inherently fascinating, but because this one company managed to be, at different points in its life, a national symbol, a monopoly, a cautionary tale, a zombie, and finally, a footnote and somehow took seventy years to get through all five.

The Watch as Nation-Building

Picture India in the early 1960’s. The country is young, industrializing, and self-consciously trying to prove it can build things real things, not just import them. A factory in Bangalore, originally set up in 1953 to make machine tools (lathes, presses, the unglamorous stuff of industrial life), strikes a technology deal with a Japanese company called Citizen. Two hundred Indian engineers go to Japan to learn how to make watches. They come back, and in 1961, the first Indian-made wristwatch rolls off an assembly line.

Nehru is said to have personally pushed for this. Not because India desperately needed watches, but because watches meant something larger — a country that could measure and master its own time, literally and symbolically. The tagline that followed wasn't just advertising copy. It became something people actually believed: Timekeepers to the Nation.

For the next three decades, that wasn't an exaggeration. By the early 1990s, HMT controlled 71% of the entire mechanical watch market and 55% of all organized watch production in the country. An HMT watch wasn't just a timepiece — it was a wedding gift, a graduation present, the thing your father bought with his first salary and never stopped wearing. The company built real engineering depth too: hairsprings, mainsprings, shock absorbers, even the watch cases — almost everything made in-house, across plants scattered from Bangalore to Kashmir.

This was a company that, on paper, had every reason to last forever.

The Year Everything Forked

Here's where the story gets interesting, because it isn't really a story about decline. It's a story about a single year — 1994 — where two companies faced the exact same storm and walked away from it in completely opposite directions.

The storm had been building for a decade. In 1984, a new competitor called Titan — a joint venture between the Tatas and the Tamil Nadu government — entered the market with something HMT didn't have: quartz movements, contemporary design, and an actual marketing strategy. Then in 1991, India threw open its economy. Suddenly Citizen, Casio, Seiko, Timex, Swatch — all the brands HMT had never needed to worry about — were sitting on the same shelves.

HMT had never competed for anything in its life. It had only ever supplied.

In 1994, the company posted its first loss in history — roughly ₹90 crore. That same year, in the same shaken-up market, Titan turned a profit of about ₹20 crore. Same shock. Same year. Completely opposite trajectories.

But here's the detail that I think matters more than the loss itself: 1994 was also the year Titan launched Tanishq and quietly began turning itself into a jewellery company that happened to also sell watches. HMT, meanwhile, kept making more or less the same mechanical watches it had been making since the 1960s, off the same Citizen-licensed design it had never really updated.

Today, watches make up roughly 7% of Titan's revenue. Jewellery is nearly 90%. Titan didn't just win the watch war — it made winning the watch war optional to its own survival. HMT bet its entire existence on one category, at the exact moment that category stopped being a safe bet to depend on.

HMT never had another profitable year after 1994. Not one. Not ever again.

The Slow, Strange Math of Dying

Most companies that decline do so in a way that, however painful, at least makes financial sense — revenue falls, costs fall roughly alongside it, losses shrink toward some kind of equilibrium, and eventually the business either stabilizes or quietly winds down.

HMT did something stranger. Between 2001 and 2013, its revenue collapsed by roughly 90% — from about ₹109 crore down to just ₹11 crore. You'd expect losses to shrink too. Instead, they more than quadrupled, hitting ₹242 crore in that final year alone. The business was getting smaller and the bleeding was getting worse, simultaneously, for over a decade.

If you want to understand why, you don't need quarterly results. You need one number: by 2015, HMT Watches was bringing in somewhere between ₹6 and ₹8 crore a year in revenue — and paying out ₹40 crore a year in wages alone.

Sit with that for a second. The single biggest line item on the cost sheet was five to six times larger than the entire business. Not a margin problem. Not a pricing problem. A company whose body had simply outgrown what its business could feed.

I tried reconstructing what the actual cost sheet might have looked like that year — HMT never published a fixed-versus-variable breakdown, so this is an estimate built from the disclosed numbers, not an audited figure, but it's instructive. On roughly ₹7 crore of sales, with typical material and production costs eating up about 70% of that, the company was likely still generating a positive contribution margin — something like ₹2 crore left over after variable costs, which on its own isn't a disaster. Watches, it turns out, weren't fundamentally unprofitable to make.

But fixed costs — wages, plant overheads, administration — came to somewhere around ₹47 crore. Against ₹2 crore of contribution. The arithmetic of break-even, in a business like this, is brutally simple: you divide fixed costs by your contribution margin percentage. Do that here and the number that comes out is about ₹158 crore in required sales — just to break even. Not to be profitable. Just to stop losing money.

For context, that breakeven figure is roughly half of the highest revenue HMT Watches had ever achieved in its entire history, back in 1991, under monopoly conditions nobody would ever see again. The company needed to recreate half its best year ever, in a market it had already lost, just to tread water.

It never had a chance.

Why Nobody Pulled the Plug Sooner

This is the part of the story that I find genuinely instructive, more than the decline itself — because the obvious question is: if the math was this clearly broken by the late 1990s, why did it take until 2016 to actually close the business?

The answer is almost as interesting as the failure itself: closing it down was, itself, too expensive.

To offer a voluntary retirement scheme to just 1,100 employees — a fraction of the workforce — would have cost an estimated ₹400 crore. Money a company already drowning in losses simply didn't have. So the company kept running, kept losing, kept accumulating liabilities, because the exit required capital that only existed in the form of more losses.

By 2015, things had gotten dark enough that employees at the watch division hadn't been paid in seventeen months. This wasn't a company managing a graceful decline anymore. It was a company that was operationally insolvent years before anyone made it official.

The first loss was 1994. The closure was approved in 2016. Twenty-two years.

I think this is the real lesson sitting underneath all the watch nostalgia: the disruption itself didn't kill HMT. Companies survive disruption all the time, even badly. What killed HMT was the twenty-two years it spent unable to act on a problem it could see clearly the entire time.

Every year of delay let the fixed-cost structure compound against a shrinking revenue base, until the cost of fixing the problem became larger than the company itself.

It Didn't Actually Die in 2016

Here's the twist almost nobody knows, and it's my favorite part of this whole story.

The “closure” in 2016 — the one every retrospective references, the one that ended with VRS payouts and shuttered factories — wasn't actually the end. For years afterward, a small operation tucked away in Jalahalli, Bangalore kept quietly assembling and selling watches, using whatever parts were left in inventory. Not a relaunch. Not a comeback. Just a company that had been declared dead, continuing to do a small, undramatic version of the thing it used to do, because apparently nobody told it to stop.

There was even a flicker of hope in 2024, when the Ministry of Heavy Industries floated reviving the long-dormant Srinagar factory as part of the broader Atmanirbhar Bharat push. Nothing has come of it yet, but the door, technically, was never fully shut.

And then, this March — quietly, with no fanfare, a decade after the public assumed the story was over — HMT Watches Limited was formally struck off the company register. Section 248(2). The actual, legal, final end.

Even now, the HMT name isn't fully gone. A separate entity, HMT Machine Tools Limited, is still government-owned and very much operating today — about 2,500 employees, still making equipment for railways and defence. It's the part of the original 1953 company that the watch division was, technically, only ever a side project of.

The Irony of the Afterlife

One more thing worth sitting with before we close this out. HMT spent two decades failing to capture the value of its own brand. And then, after it died, somebody else did it for them.

A real collector's market has grown up around old HMT watches — pieces that once sold for a few hundred rupees now changing hands for ₹5,000 or more among collectors. Scarcity does what marketing couldn't. There's even a slightly murkier corner of that market now, where leftover factory parts get reassembled and sold as “original,” which is its own small lesson in how authentication becomes valuable the moment provenance becomes uncertain.

But the headline irony is the one worth remembering: a brand that couldn't generate a profit for itself for twenty-two straight years is now, in its absence, generating real value for everyone except the company that built it.

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So What Should Have Happened Differently?

If I had to compress this into the advice a strategy class would actually use, it isn't really about watches at all.

The real decision window wasn't 2014. It was 1984 to 1994 — the decade when HMT could see Titan rising and liberalization coming, and chose to keep doing what it had always done. A smarter company would have used its own relationship with Citizen — the very company also leading the global shift to quartz — to build a second product line instead of defending an aging one. Keep the cheap, rugged mechanical watch for the price-sensitive buyer who genuinely wanted it. Build something new for everyone else.

Failing that, the next-best moment was 1994 itself — restructure at the first loss, not the twentieth. A VRS and plant consolidation that year, while liabilities were still small and the brand still had real equity, would have cost a fraction of what it eventually cost two decades later, in money and in dignity.

And underneath both of those is a more structural point: a state-owned company with no real outside shareholders, no independent board with teeth, and every restructuring decision routed through Cabinet-level approval, has no internal mechanism that forces it to act quickly when it should. Titan, notably, wasn't fully government-run either — it was a joint venture from day one, with private capital discipline baked in. That difference alone may have mattered more than any single product decision.

HMT had a genuinely strong brand through the 1980s, and instead of spending that equity while it was still worth something, it let that equity erode in silence for over twenty years — until almost nothing was left of it except nostalgia. And nostalgia is the one thing a dying company can't cash in for itself. Someone else always gets to do that.

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If you owned an HMT watch growing up, or have come across the post-2016 “Jalahalli” pieces in the collector market, I'd genuinely love to hear about it — reply and tell me.

A note on the numbers: most of the financial figures here come from peer-reviewed case studies, company filings, and contemporaneous business reporting. The cost-sheet reconstruction in Part Three is an estimate built from disclosed turnover and wage-bill figures — HMT never published an internal fixed/variable cost breakdown — and should be read as illustrative of the mechanics, not as an audited number.