3-way trial by fire for Chandra's next-in-line
The next chairman of Tata Sons will inherit a group that is financially stronger and more diversified than it was a decade ago, but also
The next chairman of Tata Sons will inherit a group that is financially stronger and more diversified than it was a decade ago, but also one that carries a few expensive bets whose returns could still be years away.Three businesses in particular -- Air India, Tata Electronics and Tata Digital -- are likely to demand close attention from the new leadership. Together, these newer ventures reported losses of nearly Rs 29,000 crore in the last financial year, ToI reported a day after N Chandrasekaran decided to step down as Tata Sons chairman.During the upcoming transition, Chandra will remain in the position until February 2027, while the group begins the process of identifying its next chief. ET reported yesterday that the next chairman will inherit a portfolio that includes businesses facing complex operational and profitability challenges.Air India turnaround remains a long roadAir India is likely to be the most visible challenge.The Tata Group took control of the airline in 2022 and has since embarked on an ambitious restructuring programme, including fleet expansion, consolidation of its aviation businesses and investment in customer-facing capabilities.Also read | Tata Trusts to set up panel for Chandra’s successorYet the financial turnaround has not happened at the pace initially hoped for, with Air India's losses more than doubling to Rs 22,238 crore in 2025-26, according to latest available data.The airline is also strategically important beyond its financial performance.
The government sees the Tata Group as a key private-sector partner in building India's aviation capabilities, making the airline's revival significant for both the group and the wider economy.The challenge for the new chairman will be to balance the scale of investment required in Air India with the need to establish a credible path to profitability.Semiconductor bet needs patienceTata Electronics presents a different problem.The group has committed substantial capital to semiconductors and electronics manufacturing, areas that are central to India's ambition to build domestic manufacturing capabilities and reduce dependence on overseas supply chains.Also read | Chandrasekaran’s exit leaves $120 billion spending ambition in limboThe government has been encouraging private-sector participation in these strategic industries, while the Tata Group has emerged as one of the most prominent investors.Tata Electronics has already become a major business within the conglomerate. Its revenue has crossed Rs 1.3 lakh crore, making it the group's fourth-largest company by revenue.But scale does not automatically translate into profits. Semiconductor manufacturing involves high upfront investment, lengthy gestation periods and significant execution risks. The new chairman will therefore have to decide how aggressively the group should continue investing while waiting for these businesses to mature.The stakes extend beyond chips.
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