Tata Sons’ new ventures are facing major financial challenges, with combined losses projected at up to Rs 29,000 crore in FY26—far exceeding an earlier estimate of Rs 5,700 crore. The surge in losses is largely driven by Air India, along with Tata Digital, Tata Electronics, and Tejas Networks.
Chairman Natarajan Chandrasekaran is expected to present a detailed turnaround plan at the June board meeting, addressing concerns raised by Noel Tata over rising losses and execution gaps. The deferral of Chandrasekaran’s third-term reappointment at the February board meeting reflects unease over the group’s financial performance.
Tata Digital under the spotlight
Among the group’s newer ventures, Tata Digital is a major concern. Launched in 2019, the platform—covering BigBasket, Tata 1mg, Croma, Tata CLiQ, and Tata Neu—has yet to turn profitable despite investments exceeding Rs 24,000 crore. FY26 losses are expected to exceed Rs 5,000 crore, with Rs 3,750 crore already recorded in the first nine months.
Analysts point to leadership instability, slow product improvements, and a loyalty program mistaken for a growth engine. Competitors outpaced BigBasket not because of brand but execution, focusing on faster delivery and dense infrastructure. Observers have also questioned whether Tata Digital’s services could be run more efficiently by individual group companies.
Air India remains the largest contributor
Air India is expected to account for Rs 20,000 crore of FY26 losses—ten times higher than previous estimates—with Rs 15,000 crore already reported in nine months. Analysts caution that management alone cannot be blamed, citing external factors like Pakistan’s airspace closure, crude oil prices over $100, and the Ahmedabad flight crash as part of a “perfect storm.” Still, they emphasize that service quality remains Tata’s responsibility.
Other ventures
Tata Electronics is projected to post a Rs 3,000 crore loss, while Tejas Networks may swing to a Rs 1,000 crore loss from a profit of Rs 500 crore in FY25. The widening gap between projected and actual performance has intensified scrutiny of Chandrasekaran’s strategy, particularly balancing long-term bets with near-term financial strain.
Overall, Tata Sons’ new ventures are under pressure to improve operational efficiency, control costs, and enhance profitability, with the board expecting a clear roadmap from the chairman in June.
