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Tata Group Under Chandrasekaran: Turnarounds Amid Earnings and Market Headwinds
N Chandrasekaran led Tata Sons during a period when several Tata companies grew slowly.
Their sales increased only a little in FY26, and profits barely rose.
Tata shares also lost more value than the broader Nifty 50 market.
However, Chandrasekaran helped Tata Motors' passenger-vehicle business recover.
He also improved the performance of Indian Hotels, Tata Steel, and Tata Consumer.
The group's debt compared with its equity became lower, and its return on net worth improved.
Some newer, unlisted Tata businesses continued to make losses.
TCS, an important source of money for Tata Sons, also grew more slowly and paid smaller dividends.
This could make it harder for Tata Sons to finance new businesses and support loss-making companies.
N Chandrasekaran decided to resign as Tata Sons chairman amid slowing earnings growth and weak stock-market performance.
Listed Tata companies' combined sales rose 3.9% and adjusted profits increased 1.2% in FY26.
The group's combined market capitalisation fell 16.9% in FY26, compared with a 3.7% decline for Nifty 50 companies.
Chandrasekaran revived Tata Motors' domestic passenger-vehicle business and improved Indian Hotels, Tata Steel, and Tata Consumer.
Slower TCS earnings growth and reduced dividend payouts may constrain Tata Sons' funding for new ventures and loss-making subsidiaries.
- Who
- N Chandrasekaran and the Tata Group's listed and unlisted companies.
- What
- Chandrasekaran decided to resign as Tata Sons chairman after a period of slower earnings growth, weak share performance, and losses at some unlisted subsidiaries.
- Where
- Across Tata Group companies and their stock-market listings in India.
- When
- The performance described covers FY26, with comparisons extending to FY12, FY17, FY20, FY24, and FY25.
- Why
- The group faced slowing sales and profit growth, declining market capitalisation, weaker TCS performance, and mounting losses at some newer unlisted subsidiaries.
Evidence of Progress
Evidence of Strain
Business turnaround
Evidence of Progress
Chandrasekaran revived Tata Motors' domestic passenger-vehicle business and returned Indian Hotels, Tata Steel, and Tata Consumer to growth.
Evidence of Strain
The group still faces mounting losses at unlisted subsidiaries, many of which were established during Chandrasekaran's tenure.
Financial strength
Evidence of Progress
The listed companies reduced leverage, with gross debt-to-equity improving to 0.7, while average return on net worth rose to 19%.
Evidence of Strain
Combined sales grew only 3.9% and adjusted profits just 1.2% in FY26, indicating a significant earnings slowdown.
Stock-market performance
Evidence of Progress
Tata companies' combined market capitalisation rose 233.9% between March 2016 and March 2026.
Evidence of Strain
The group underperformed Nifty 50 companies in FY25 and FY26, with combined market capitalisation falling 16.9% in FY26.
Key facts
- FY26 sales growth
- Listed Tata companies' combined net sales, excluding Tata Capital, grew 3.9% year over year to Rs 11.8 trillion.
- FY26 adjusted profit
- Combined adjusted net profit rose 1.2% year over year to Rs 90,698.4 crore.
- Market capitalisation
- Combined Tata market capitalisation fell 16.9% in FY26 to around Rs 22.82 trillion.
- Nifty 50 comparison
- The combined market capitalisation of Nifty 50 companies declined 3.7% in FY26.
- Debt ratio
- Listed Tata companies' gross debt-to-equity ratio improved to 0.7 in FY26 from 1.1 in FY17.
- Return on net worth
- The group average return on net worth reached 19% in FY26, compared with 16.2% in FY17.
- TCS performance
- Tata Consultancy Services' adjusted net profit increased 8.3% in FY26, while its market capitalisation fell 34.6%.
Sources
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