Brace for a tougher business climate, says Tata Sons chairman N Chandrasekaran

NEW DELHI: Tata Sons chairman N Chandrasekaran has asked over 30 CEOs and managing directors of group companies to brace for a tougher business environment, as the war in West Asia is disrupting supply chains, sources said.

At a review meeting on the war’s implications on Thursday, Chandrasekaran told top executives that more than 10,000 Tata employees are based in the region, including those from Voltas, TCS, Indian Hotels, and Titan (including Damas), and outlined steps to facilitate their return, according to a person with direct knowledge.

During the assessment, a common theme that emerged was that supply chain disruptions and rising commodity prices would weigh on demand, while pushing up operating costs, resulting in margin pressure, the sources said. For many of the companies, it would mean that production yield is likely to be less than capacity.

“The chairman advised to be prepared for tougher business environment marked by demand slowdown, project delays, driven by supply chain disruptions and cost increases due to oil price, shortages, currency movements, logistics costs, among others,” the source said.

Chandrasekaran recommended measures that need to be focused on conserving and managing cash carefully and judiciously. He also advised careful choosing of starttime for projects and “if necessary, have a relook at the timelines”. Top group executives were also informed about the need to enhance cyber security readiness and network resilience, run cost improvement programmes with clear targets. Moreover, he also stressed on the need to “take care of employees, including temporary employees”.

“Further, we need to immediately address anxiety and stress-related issues of our employees and their families in the region.” Chandrasekaran said the group has assisted in enabling travel back home of employees and their families in transit in the UAE through Air India.

He urged executives to be prepared for post-recovery scenario once conflict is over. “You must be in a state of readiness — be agile; do not lose momentum,” Chandrasekaran is understood to have told the top executives.