Tata Electronics, Air India, and Tata Digital, now in their developmental phases, are expected to gain scale and become financially robust businesses within the next three years, Tata Sons Chairman N Chandrasekaran told The Economic Times in an interview. These companies are projected to rank among the Tata Group’s top 10 businesses in this period.
“Our group’s future growth bets are woven along the country’s growth ambitions,” said Chandrasekaran, who became Tata Sons chairman in February 2017 and was reappointed for five more years in 2022.
Chandrasekaran described FY24 as a “great year” for the group, with aggregate revenue rising 13 percent and profit surging over 50 percent. The group's total revenue surpassed $165 billion, with net profit exceeding $13.5 billion. The group’s net debt remained stable, he noted.
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Significant investments have been directed towards Tata Electronics, Tata Digital, Air India, and battery manufacturing, with total investment commitments across businesses estimated at $90 billion. Chandrasekaran revealed that these investments will surpass $120 billion over the next five years. Tata Electronics alone is expected to receive more than $18 billion in investment and is projected to rank among the top five group companies by revenue by FY27, turning profitable that same year.
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Tata Electronics is set to employ over 200,000 people in manufacturing roles and is on track to close the year with $10 billion in revenue run rate. Chandrasekaran highlighted the group's rapid progress. “Tata group has done in three years what would otherwise typically take 10 years in the electronics sector. That is the pace we are moving at.”
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The group's established companies are also hitting fresh milestones. The market capitalisation of Tata Power, Tata Consumer, Trent, and Indian Hotels has crossed Rs 1 lakh crore, while Tata Motors, valued at over Rs 4 lakh crore, is nearly debt-free. Tata Steel is investing £750 million in a new electric blast furnace, with an additional £500 million investment from the UK government, he added.
Chandrasekaran acknowledged the challenges in building scalable and profitable businesses in e-commerce and aviation but sounded optimistic. “Building a seamless business takes time. Tata Consultancy Services (TCS), for example, took 28 years to reach its first $100 million in revenue after its founding in 1968.”
Since Tata Digital's launch two-and-a-half years ago, its app performance has improved significantly. “The app is stable and user-friendly today. Our financial services are doing incredibly well. In August, Tata Digital was responsible for 5 percent of the total credit cards issued in India. The gross merchandise value (GMV) for Tata Digital has crossed Rs 40,000 crore in annual run rate, and performance continues to improve each quarter,” he said. While grocery has underperformed, the group is making necessary adjustments. “We were a bit late in recognising the rise of quick commerce, but we are now fully engaged in that space.”
In aviation, Air India is undergoing a major transformation, though fleet modernisation has been delayed due to supply chain disruptions at Airbus and Boeing, affecting the arrival of new wide-body aircraft. However, by the third quarter of next year, all narrow-body aircraft will either be new or fully modernised. Despite these challenges, Chandrasekaran emphasised that the integration of Vistara with Air India is progressing well. "A fully integrated Air India is expected to offer a consistent and improved customer experience by 2026," he said.
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