HGS India imported 74% of FY26 purchases, supplier base concentrated

HGS India imported 73.65% of its raw-material purchases in FY26, up from 59.58% in FY24, while its 10 largest suppliers accounted for 69.32% of FY26 purchases. The disclosed procurement structure combines exposure to overseas supply and foreign-currency movements with reliance on a limited supplier group that has no long-term supply agreements.

How dependent was HGS India on imported raw materials in FY26?

HGS India sourced 73.65% of raw-material purchases through imports in FY26, equal to Rs 12.3223 crore out of total purchases of Rs 16.7313 crore. HGS India uses plastic granules, copper, brass, aluminium, stainless steel, mild steel and special conductors to manufacture products including geophones, seismic cables and connectors.

The import share increased across the three reported full financial years, from 59.58% in FY24 to 68.99% in FY25 and 73.65% in FY26. Imported raw-material cost rose from Rs 4.0289 crore in FY24 to Rs 7.8931 crore in FY25 and Rs 12.3223 crore in FY26, while total purchases increased from Rs 6.7619 crore to Rs 16.7313 crore.

HGS India’s import reliance was 76.34% in the stub period ended April 30, 2026, when imported materials cost Rs 35.98 lakh out of purchases of Rs 47.13 lakh. A stub period is a reporting period shorter than a full financial year, so the April 30, 2026 figure records purchases booked in that period rather than a full-year procurement mix.

Which countries accounted for HGS India’s FY26 purchases?

HGS India obtained 83.29% of FY26 purchases from India, Belgium, the Netherlands and the United States. India supplied Rs 4.409 crore, or 26.35% of FY26 purchases, followed by Belgium at Rs 4.3029 crore, or 25.72%, and the Netherlands at Rs 3.2791 crore, or 19.60%.

Belgium was a new material source in the disclosed three-year comparison, supplying no purchases in FY24 or FY25 but 25.72% in FY26. India’s share fell from 40.42% in FY24 to 26.35% in FY26, while the United States’ share fell from 24.35% to 11.62%; the Netherlands’ share increased from 11.96% to 19.60%.

HGS India also reported FY26 purchases from Canada, Kazakhstan, Germany, Italy, China, Malaysia, Singapore, the United Kingdom, Cyprus and Hong Kong. The company states that raw materials are sourced from third-party suppliers in India and imported from overseas markets, making availability dependent on supplier capacity, demand, logistics and conditions in multiple jurisdictions.

How concentrated were HGS India’s purchases among suppliers?

HGS India’s 10 largest suppliers provided Rs 11.5983 crore of purchases in FY26, representing 69.32% of total purchases of Rs 16.7313 crore. The company therefore depended on 10 suppliers for more than two-thirds of its FY26 procurement spending.

The top-10 supplier share was lower than 77.12% in FY25 and 81.39% in FY24. The reduction of 12.07 percentage points from FY24 to FY26 indicates that the supplier mix became less concentrated by this measure, even as the import share increased by 14.07 percentage points over the same period.

Supplier concentration was higher in the stub period ended April 30, 2026, when the top 10 suppliers accounted for Rs 46.68 lakh, or 99.04%, of purchases of Rs 47.13 lakh. That percentage relates to the shorter reported period and cannot alone establish the supplier concentration for a subsequent full financial year.

Why do imported purchases and supplier concentration create risk for HGS India?

HGS India states that it has recurring procurement arrangements with global suppliers for seismographs and sensors, but no long-term supply agreements with its suppliers. The absence of long-term contracts means HGS India has no disclosed fixed-price protection for raw materials and components purchased from its supplier base.

HGS India says raw-material price volatility may reduce margins if higher costs cannot be passed on to customers. This risk would depend on the company’s ability to arrange replacement suppliers on commercially viable and timely terms, especially for components used in specialised seismic equipment.

Raw-material quality is another operating condition. HGS India says product quality is primarily derived from the quality of raw materials, and deterioration in supplied materials could affect product quality, sales volumes and market reputation. HGS India supplies products used in oil and gas exploration, coal exploration, civil engineering, defence research, earthquake seismology and other mining and geoscience applications.

What could amplify a disruption in HGS India’s supply chain?

A significant or prolonged shortage of raw materials could prevent HGS India from meeting production schedules and delivering products on time, according to its risk disclosure. HGS India states that a failure to procure materials from other sources could affect sales, margins and customer relations.

Production is conducted at HGS India’s manufacturing facility in Manesar, Haryana, which uses precision assembly lines, injection moulding units, coil winding and magnetising equipment. A supply shortage could therefore coincide with the operational risks associated with machinery breakdowns, planned maintenance shutdowns or capacity-expansion work at the same facility.

Supplier continuity also has a working-capital dimension. HGS India reported trade payables of Rs 1.0035 crore in FY26, compared with Rs 1.1854 crore in FY25 and Rs 38.46 lakh in FY24, and states that delayed payments to creditors could affect supplier relationships and lead to delayed or stopped deliveries.

Foreign-currency exposure is a separate cost channel because HGS India pays for some raw materials in US dollars, euros and other currencies while preparing financial statements in Indian rupees. HGS India says rupee depreciation makes imports more expensive, and it reported foreign-currency fluctuations of Rs 1.0628 crore in FY26, compared with Rs 37.48 lakh in FY25 and Rs 21.12 lakh in FY24.

Conclusion

HGS India’s FY26 procurement profile combines two disclosed exposures: imports represented 73.65% of raw-material purchases and 10 suppliers accounted for 69.32% of purchases. The full-year comparison shows that import reliance rose from FY24, while supplier concentration declined but remained above two-thirds of procurement spending.

The next matters to watch are whether HGS India enters long-term or fixed-price supply arrangements, whether import dependence remains above the FY26 level and whether payments to suppliers remain timely. HGS India has disclosed a plan to use part of initial public offering proceeds for replacement plant and machinery, an in-house gold-plating facility and building infrastructure at its existing manufacturing facility, subject to financing, costs and implementation timing.