The $125-billion salt-to-aviation Tata Group is undergoing a massive transformation as it gets future ready and bets on five key businesses – ecommerce, aviation, semiconductors & electronics, 5G and batteries. “We have made serious commitment to new businesses, and all five have to deliver,” Tata Sons chairman N Chandrasekaran tells Kala Vijayraghavan & Bodhisatva Ganguli. Chandrasekaran is also pleased with the turnaround posted by the big Tata Group companies, aided by synergies. Edited excerpts from an exclusive interview.
What is your assessment of Tata Group’s performance in last five years? You had stated when you took charge that businesses should earn their right to working capital and generate enough profits within a stipulated period to fund growth plans. How do you think the bigger companies have fared?
Tata Sons and group companies are today in a good space. Fundamentally, all initiatives we undertook had three pillars: strengthen the core, transform the core and create future businesses. We followed a combination of principles and strategies over the last five years where we said fitness first, performance next; and we capitalised all our companies. Second, we said we want to simplify, synergise and scale. Third, we said, it has to be ‘One Tata’.
Each of these companies today has a simplified structure which may not be visible from the outside, but there is a clear focus in terms of the number of businesses they are in, the number of entities they have and the geographies they are present in. So, across companies, whether in Tata Steel or Tata Power, synergistic businesses have come together in, say, Tata Consumer or a defence company, or the way companies got together to launch an EV. That is the collaboration, synergy and ‘One Tata’.
Tata Motors is a huge turnaround story. Earlier, every big Tata company – whether Tata Power, Tata Motors or Tata Consumer – used to have a negative story around it. Today, that conversation has changed, and every company has a positive story. I am proud of how all these companies have staged a turnaround backed by synergies. Scale is something visible across companies, whether in terms of capacity expansion, number of stores in retail formats, capacity expansion in automobiles or aspiration in renewable energy.
We have also initiated a transformation of the core on four themes: digitalisation, sustainability, supply chain resilience,wellness and safety. Digitalisation is a journey where every company thinks data first. A sustainable transformation is the market transition we are making whether in EV or fuel, renewable energy and carbon capture and the huge commitment towards biodiversity and water consumption. We have a comprehensive plan across the group to be net zero by 2045, and every company has a goal in terms of all these dimensions.
Air India’s acquisition by Tatas had every Indian cheering. But the challenges to make it operationally viable are huge.
For us, Air India is a hugely important business and not just an emotional investment. We are determined to do all we can to make it work. I am directly spending a lot of time on Air India. But there are lots of issues that need heavy lifting. There is no magic wand… A lot of work needs to be done on IT systems, processes, maintenance, fleet, ground handling, HR, training, network planning. We are working on all dimensions.
We have allocated significant capital for Air India of about ₹15,000 crore in terms of equity alone. We are fixing issues in a systemic way, and there will be no temporary fixes. We are working on the reorganisation of Air India through talent, training, deployment of IT systems to offer better products with a modern fleet and ground handling through data analytics.