Is a Fresh Lease of Life at HMT`s Praga Possible?

Case Code: BSTR694 Case Length: 8 Pages Period: - Pub Date: 2025 Teaching Note: Available

Price: Rs.300 Organization : Praga Tools Limited Industry : Industrial Goods & Machinery Countries : India Themes: Turnaround Strategy, Five Forces Strategic Planning,Brand Revival

Abstract Case Intro 1 Case Intro 2 Excerpts

Abstract

The case study, “Is a Fresh Lease of Life at HMT’s Praga Possible?” discusses the possibility of an eventual turnaround being achieved at Praga Tools Limited (Praga), a unit of HMT Machine Tools Limited (HMTMTL) – a wholly owned subsidiary of Indian Central Public Sector Enterprise (CPSE), HMT Ltd. (HMT). Praga – a precision tool manufacturing unit – had seen a period of significant growth and development, particularly from the 1960s to the 1990s, which could be considered its “golden period.” However, once India’s economy was liberalized in 1991, Praga could not withstand the onslaught of global competitors with their advanced technologies.

The case discusses the various challenges plaguing the company – systemic inefficiencies, outdated technology, limited modernization, and poor workforce engagement. The various revival efforts made by the Government of India (GoI) through the decades had yielded limited results and Praga was experiencing mounting losses. As of 2025, the GoI had clarified that it intended to expand HMTMTL’s various divisions including Praga, but had yet to come up with another revival plan. Amid growing global and domestic opportunities in the machine tools industry – prompted by AI, IoT, and the ‘Make in India’ initiative – analysts believed that Praga’s revival was still possible with focused investment in modernization, employee upskilling, and inclusive management practices. What do you think?

Issues

The case is structured to achieve the following teaching objectives:

• Understand the business environmental forces that impact an organization in the public sector.
• Identify the factors restricting the growth of public sector units in a globalized market.
• Evaluate the effectiveness of government interventions and revival packages for loss-making public enterprises.
• List strategies to revive sick companies

Contents

Introduction
Background Note
The Merger
Troubled Times
The Road Ahead
Exhibits

Keywords

Merger; Modernization; Public Sector; Employee Morale; Liberalization; Bureaucratic Inertia; Technological Obsolescence; Strategic Turnaround; Workforce Management; Competitive Disadvantage; Disinvestment; Change Resistance; Operational Efficiency; Revival Packages,Praga Tools Limited; HMT; HMTMTL; Innovation Gap; Indian Central Public Sector Enterprise (CPSE); Public Sector Unit (PSU)

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