Now Reading: Tata group market cap falls 16.9% under Chandrasekaran
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Tata group market cap falls 16.9% under Chandrasekaran
Tata Sons chairman N Chandrasekaran has decided to resign, leaving behind a mixed record of muted financial performance from listed companies and mounting losses at unlisted subsidiaries. In FY26, combined sales of…
Tata Sons chairman N Chandrasekaran has decided to resign, leaving behind a mixed record of muted financial performance from listed companies and mounting losses at unlisted subsidiaries. In FY26, combined sales of listed Tata companies grew just 3.9% year-on-year to Rs 11.8 trillion, while adjusted net profit inched up only 1.2% to Rs 90,698.4 crore.
The group's combined market capitalisation fell 16.9% in FY26, sharply underperforming the Nifty 50 which declined only 3.7%. This is the first time since at least FY11 that Tata companies' mcap has fallen for two consecutive years, dropping to about Rs 22.82 trillion from a record Rs 29.88 trillion in March 2024.
Chandrasekaran did successfully revive Tata Motors' passenger vehicle business and improved performance at Indian Hotels, Tata Steel and Tata Consumer. The group's gross debt-to-equity ratio improved to 0.7 in FY26 from 1.1 in FY17, and average return on net worth rose to 19% from 16.2% over the same period.
Indian Opinion Analysis
The resignation marks the third successive Tata Sons chairman to exit during an earnings slowdown, following Ratan Tata in 2012 and Cyrus Mistry in 2016. The core structural challenge is that TCS, the group's cash cow, is itself seeing slower earnings growth, which constrains the holding company's ability to fund loss-making unlisted ventures. The next chairman inherits not just a mcap that has lost Rs 7 lakh crore from its peak, but also a portfolio of newly created subsidiaries that have yet to prove their viability. The key number to watch is the combined adjusted net profit trajectory for FY27, especially whether TCS dividend payouts can sustain the group's investment pipeline.
Source: rediff.com
This story was synthesised by AI from the source linked above.
