Mumbai, June 27, 2006 (Reuters)

The state-run HMT Ltd. expects a consolidated revenue growth of 30-35 percent in 2006/07, fuelled by higher demand for tractors and machine tools, the company's chief said on Tuesday.

HMT had also submitted a revamp plan to the Indian government, which owned 98.24 percent in the company, to help improve operational efficiency and competitiveness, Chairman and Managing Director M.S. Zahed told Reuters.

"Tractor sales should be good this year since monsoon appears to be good, farm credit is available and banks are also supporting agricultural growth," he said.

HMT, along with its six subsidiaries, had reported a provisional consolidated revenue of 7.8 billion rupees in the year to March 2006, up 10.5 percent from 7.06 billion rupees in the previous year.

The company, Zahed said, planned a capital expenditure of 1.8 billion rupees in the current financial year mainly on plant upgradation for its machine tools subsidiary. In 2004/05, the company spent 500 million rupees.

"We are increasing our spend this year as we have a vision to touch revenue of 20 billion rupees at the end of the next two years," Zahed said.

The company also expected the government's approval to its revamp plan within this financial year, he said.

In its machine tools business, HMT would start supplying to aviation and defence customers, Zahed said.

"In the area of machine tools we have to get the latest technology and create a strong base," he said.

The company also planned to launch high-speed tractors, he said.