Tata Sons’ Profit Surges 74% in FY24, Boosting Revenue and Expanding Business Portfolio
Tata Sons, the principal investment holding company of the Tata group, witnessed a remarkable increase in its performance for the fiscal year 2024 (FY24). The company saw a surge in the number of subsidiaries, growing from 289 in FY23 to 322 in FY24. Alongside this expansion, Tata Sons’ profit recorded an impressive 74% jump, reaching a consolidated net profit of ₹49,000 crore, up from the previous year’s figures. This surge was driven by significant improvements across sectors such as information technology, financial lending, and airlines.
The Mumbai-headquartered company’s consolidated revenue for FY24 also saw a notable rise, hitting ₹4.77 lakh crore, a 15% increase compared to FY23, as per the 106th annual report. Not only did the revenue grow, but Tata Sons’ profit attributable to shareholders more than doubled, soaring to ₹34,625 crore compared to the previous year, reflecting the group’s robust business operations and strategic growth.
Tata Sons’ Profit Growth Drives Dividend Increase
Following the impressive performance in FY24, Tata Sons’ directors have recommended a dividend payout of ₹35,000, which is double the ₹17,500 paid in FY23. If approved by shareholders, this recommendation will result in a significant cash outflow of ₹1,415 crore, up from ₹707 crore in FY23. The jump in dividends is a clear reflection of the company’s increased profitability and commitment to sharing the financial success with its shareholders.
In addition to increased profits, the Tata group’s combined market capitalization at the end of FY24 stood at ₹30.37 lakh crore, a significant 47% increase from ₹20.71 lakh crore at the close of FY23. The jump in market capitalization further solidifies the Tata group’s leadership in the Indian market, driven by its diversified business portfolio and strong financial performance.
Tata Sons is leveraging the India growth opportunity by investing in emerging sectors, including global energy transition, supply chain diversification, and the adoption of artificial intelligence (AI) and data-led business transformation. The company has committed resources to ensure its businesses remain competitive and capable of seizing opportunities arising from the changing global economic landscape.
The 106th annual report emphasized that the company continues to make strategic investments in its various businesses. These investments are aimed at enabling Tata Sons’ subsidiaries to capitalize on growth opportunities while supporting the deleveraging of balance sheets across the group. As the investment holding company, Tata Sons plays a crucial role in ensuring that its subsidiaries are financially sound and well-positioned to expand in the evolving market environment.
Tata Sons’ Profit Boosted by New Ventures and Leadership
In FY24, Tata Sons incubated several new ventures as part of its business expansion strategy. These new ventures include Tata Electronics, Air India, Tata Digital, Tejas Networks, and Agratas, a battery manufacturing unit. These businesses have been identified and nurtured to capitalize on emerging industry trends such as the electrification of mobility, digital transformation, and the growing importance of renewable energy. By diversifying into these sectors, Tata Sons aims to drive long-term profitability and maintain its leadership position in the Indian and global markets.
N Chandrasekaran, the executive chairman of Tata Sons, has played a pivotal role in the company’s success. His leadership has been instrumental in steering the group toward profitable ventures and strategic investments. For FY24, Chandrasekaran earned a remuneration of ₹135.32 crore, marking a 20% increase from the previous year. His compensation places him among India’s highest-paid CEOs. Chandrasekaran is also seeking reappointment as a director, as he is liable to retire by rotation at the upcoming annual general meeting (AGM). His reappointment is seen as a key factor in maintaining continuity in the company’s strategic direction.
Tata Sons continues to expand its corporate structure, adding two new associate companies in FY24, while the number of joint ventures decreased by five, bringing the total to 32. The expansion of subsidiaries and associates demonstrates the group’s aggressive approach to business growth and investment in new ventures.
In FY24, Tata Sons applied to the Reserve Bank of India (RBI) to voluntarily surrender its registration as a Core Investment Company (CIC). This move allows the company to remain an “unregistered CIC,” which enables it to avoid being listed on stock exchanges and retain its status as a closely held private company. This decision aligns with Tata Sons’ strategy of remaining a private entity while continuing to manage its investments and subsidiaries with a high degree of autonomy.
As part of its restructuring efforts, Tata Sons repaid ₹20,642 crore in debt during FY24, leaving the company with a net cash balance of ₹2,679 crore as of the end of the fiscal year. The company also repaid all borrowings except for non-convertible debentures and preference shares, which totaled ₹363 crore. This debt reduction not only strengthens Tata Sons’ balance sheet but also enhances its financial flexibility, allowing the company to invest further in growth opportunities.
The strong financial performance in FY24 underscores Tata Sons’ ability to navigate challenges and capitalize on opportunities in a rapidly changing business environment. Tata Sons’ profit and revenue growth, combined with its expanding business portfolio and strategic investments, position the company for continued success in the coming years. As the Tata group continues to evolve, its focus on innovation, sustainability, and global competitiveness will likely drive further growth and profitability across its diverse businesses.
In conclusion, Tata Sons’ profit surge, bolstered by strategic investments and leadership, demonstrates the company’s resilience and vision for long-term growth. With an expanding portfolio, a focus on key growth sectors, and strong financial management, Tata Sons is well-positioned to remain a dominant player in both the Indian and global markets.
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