Tata Sons' new businesses sink deeper into red

Published 27 July 2026 · local

Mumbai: The private businesses of Tata Sons envisioned to take the conglomerate to its next stage of growth sank deeper into losses in FY26, led

Mumbai: The private businesses of Tata Sons envisioned to take the conglomerate to its next stage of growth sank deeper into losses in FY26, led by aviation, digital commerce, electronics assembling and battery manufacturing. Overall, losses at Tata Sons’ 16 privately held businesses nearly doubled in FY26, rising to ₹27,854 crore from ₹15,311 crore in FY25, the Tata Sons annual report published on Monday showed. The four new businesses—Air India, Tata Digital, Tata Electronics, and Agratas—accounted for the lion’s share of the losses, as they remain in their growth stage, requiring significant capital investment, before they make money. At a Tata Sons board meeting in February, Tata Trusts chair Noel Tata had questioned the hefty losses at these businesses. The board deferred a final decision on a third five-year term for Chandrasekaran after Tata's intervention. Tata Sons had ventured into the new businesses under the leadership of Chandrasekaran, who was handpicked by the late Ratan Tata to lead the conglomerate. Tata Trusts are the largest shareholders of Tata Sons, holding 65.9%. Also Read | Probe stalls transfer of Ratan Tata’s Tata Sons shares to his foundations In the annual report, Chandrasekaran compared the ongoing large investments to Tatas' earlier endeavours like the Indian Institute of Science, steelmaking, software services, and fundamental research.

“Each of these bets looked audacious, even imprudent, at the time they were made. Each took decades to prove itself. And each, in hindsight, turned out to be exactly what the nation needed," he wrote in his letter to shareholders. Appointed as Tata Sons chairperson in February 2017, Chandrasekaran's second five-year term ends in February 2027. In FY26, he was paid ₹159 crore in compensation including a commission of ₹141 crore. This compares to ₹156 crore total compensation in FY25. An email sent to Tata Sons seeking comment went unanswered. Significant investment “Losses in a diversified business group should be evaluated through the prism of the business lifecycle rather than in isolation,” said Monish G. Chatrath, managing partner at MGC Global Risk Advisory, a risk consulting firm. Businesses in aviation, digital platforms, advanced manufacturing, and semiconductor ecosystems often require significant upfront investment and longer gestation periods before they achieve sustainable profitability, he said. “From a risk management perspective, the critical question is not whether losses arise during an investment phase, but whether they are accompanied by disciplined capital allocation, effective execution and measurable progress against clearly defined strategic milestones,” he said. Air India remained the loss-leader in FY26. Its losses more than doubling to ₹22,238 crore in a forgettable year where the carrier endured one of India’s worst aviation disasters in recent history, and later bore the brunt of a surge in fuel costs as the Gulf war broke out.