N Chandrasekaran unveils 3-year plan to cut losses in Tata new businesses

MUMBAI: Tata Sons chairman N Chandrasekaran presented a three-year roadmap to narrow losses in the company's new businesses at a marathon board meeting on Tuesday, even as his reappointment remains unresolved.

The meeting, held at Tata Group headquarters Bombay House, covered three of the businesses - Air India, Tata Digital and Tata Electronics - reflecting the scale of concern raised by Noel Tata, chairman of principal shareholder Tata Trusts, over their trajectories.

The presentations covered FY26 performance across the three businesses, with Tata Electronics detailing capital expenditure projections and Air India outlining its capital infusion requirements. A financial overview slide, however, failed to convince Noel that the targets were achievable, according to people familiar with the matter.

Chandrasekaran was joined by chiefs of five new ventures - Tata Digital, Air India, Tata Electronics, battery manufacturer Agratas and telecom equipment maker Tejas Networks - for a marathon Tata Sons board meeting on the roadmap for new businesses.

Tata Digital draws scrutiny, high cost base questioned
The meeting which lasted six and a half hours - from 10am to 4.30pm - had all directors physically present.

Most of the questions came from Noel and independent director Harish Manwani, with Tata Trusts vice-chairman Venu Srinivasan also weighing in during the session.

Tuesday's meeting followed Noel's pointed questions at the Feb board meeting over volume of capital being consumed by new ventures and the scale of their losses, which had far exceeded initial projections. Internal estimates put the combined losses of the new businesses at over Rs 29,000 crore in FY26, a five-fold jump from an earlier projection of Rs 5,700 crore, with Air India accounting for the largest share.

Tata Digital drew particular scrutiny, with questions raised over its high cost base and the path to margin improvement. BigBasket, one of Tata Digital's major acquisitions, came under the microscope for its high variable costs and thin margins. Croma, another Tata Digital unit, was seen as a mixed bag: while its performance has shown some improvement, it remains far from profitable.

Air India's numbers were stark. The airline posted a loss of Rs 26,800 crore in FY26, a 12-fold increase from the previous year, and will require additional capital infusion. Noel indicated the matter should be considered at the June board meeting.

Tata Electronics offered a brighter picture. The business has reached break-even at a consolidated level, albeit with the support of govt subsidies, and revenues have crossed Rs 1 lakh crore - a ramp-up Noel acknowledged and appreciated. However, he asked for a detailed break-up across its three units: mobile component manufacturing, semiconductor fabrication and OSAT (outsourced semiconductor assembly and test) operations, the people said.

Presentations on two of the companies, Agratas and Tejas Networks, could not be taken up for lack of time.

Chandrasekaran's central message was that while full net profitability remains a longer-term milestone, he has a plan to narrow losses in the new businesses over the next three years. No formal decisions were taken at Tuesday's session, which was convened primarily to review performance of newer businesses and hear presentations from Chandrasekaran and heads of the ventures. The board is scheduled to meet again on June 12 to consider the annual accounts and other matters, when greater clarity on the group's roadmap is expected to emerge.

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