Challenges Ahead: Tata Sons’ Next Chairman Inherits Significant “Cash Losers”
These are also segments where Chandra’s track record came under scrutiny.
As speculation mounts around the leadership at Tata Sons, the incoming chairman faces the formidable task of navigating three significant “cash losers” within the sprawling conglomerate. These ventures – Air India, semiconductor and electronics manufacturing, and Tata Digital – collectively posted losses nearing Rs 29,000 crore last year, representing a critical challenge for the 158-year-old group.
The government of India views the Tata Group as a strategic partner in some of these pivotal sectors, particularly as the nation pushes for self-reliance in defence and technology. With military aircraft development in the private sector, along with advancements in drones and rocket launch systems, New Delhi is keenly observing developments at Bombay House, even while maintaining a clear, hands-off approach.
N. Chandrasekaran’s Legacy: Growth and Scrutiny
These new businesses, all brought into the Tata fold during N. Chandrasekaran’s tenure, have become central to both the group’s strategic expansion and recent financial scrutiny. The government is actively leaning on Tata to help establish India as a global hub in critical areas such as Air India’s resurgence and advanced chip manufacturing.
Air India: A Long Road to Recovery
Air India, acquired by Tata in a high-profile divestment, saw its losses more than double to a staggering Rs 22,238 crore in FY26. Industry analysts suggest that a complete turnaround for the national carrier remains several years away, requiring sustained capital infusion and operational overhauls.
Semiconductors and Electronics Manufacturing: Strategic but Slow to Break Even
In the burgeoning field of chip manufacturing, where the Tata Group has secured substantial orders, the path to profitability is also expected to be protracted. Despite the strategic importance of this sector for India’s technological independence, achieving break-even status will require significant investment and time. On a brighter note, Tata Electronics has rapidly ascended to become the group’s fourth-largest company by revenue, pulling in over Rs 1.3 lakh crore last year, indicating substantial operational scale even amidst initial losses.
Tata Digital: Struggling for Market Penetration
Tata Digital, a key thrust into the digital economy, reported losses of Rs 4,974 crore last year, widening from Rs 4,610 crore in FY25, despite revenues growing to Rs 35,990 crore. The digital arm has undergone three leadership reshuffles since its 2019 inception, signaling internal challenges in charting a clear and profitable course.
One of Tata Digital’s major acquisitions, BigBasket, acquired in 2021 for an estimated $1.5-2 billion, entered the hyper-competitive 10-minute delivery space as a late entrant. It has since ceded significant market share to competitors like Blinkit (Eternal), Swiggy’s Instamart, and younger startup Zepto. Today, BigBasket commands only an estimated 4-5% share in the quick commerce segment, dwarfed by Blinkit’s over 40%. The intensifying aggression from e-commerce giants Amazon and Flipkart further complicates its trajectory.
Moreover, Tata Digital’s ambitious “Neu” super app has struggled to make a substantial impact. Satish Meena, founder at Datum Intelligence, points to “an absence of clearer value addition and proposition for customers” for the Neu product, highlighting a fundamental challenge in user adoption and differentiation in a crowded digital landscape.
The incoming chairman of Tata Sons will thus inherit a complex portfolio. While many of these ventures hold immense strategic value for India and the Tata Group’s future, their current financial performance demands immediate and decisive action to convert significant investments into sustainable profitability.
Source: TOI Business Desk
