‘Rs 29,000 cr challenge’: Tata Sons’ new chief needs to deal with 3 major cash losers

Tata Sons, India’s largest industrial conglomerate, faces mounting pressure on its new chairman, N Chandrasekaran, as three key subsidiaries, Air India, semiconductor and electronics manufacturing, and Tata Digital, report combined losses of nearly Rs 29,000 crore for the fiscal year ending March 2026. These financial strains have placed the spotlight squarely on Chandra, who took charge of the 158-year-old firm amid growing expectations to stabilize its diverse portfolio of businesses. The government, meanwhile, continues to view the Tata Group as a strategic partner in critical sectors such as aerospace and defense technology, despite maintaining a formal distance from its operations. The challenges facing Chandra began with Air India, which saw its losses surge to Rs 22,238 crore in 2025-26, more than doubling from previous years. The airline, which the Tata Group acquired in 2022, remains a drag on the conglomerate’s finances, with analysts estimating that a meaningful turnaround could still be several years away. This comes at a time when the government is pushing for indigenous production of military aircraft and other advanced technologies, areas where the Tata Group has secured contracts. However, the success of these ventures depends heavily on resolving the ongoing financial issues within the broader conglomerate. Semiconductor and electronics manufacturing, another area of focus for the Tata Group, has also struggled to turn a profit. Despite securing lucrative orders, the segment is yet to reach breakeven, raising concerns about its long-term viability. Meanwhile, Tata Digital, which includes the failed acquisition of BigBasket, reported losses of Rs 4,974 crore in 2025-26, up from Rs 4,610 crore in the prior fiscal year. Although the unit generated revenues of Rs 35,990 crore, its inability to gain traction in the highly competitive e-commerce and digital services market has left it in need of a significant overhaul. Tata Electronics, however, stands out as a bright spot. The subsidiary reported revenues exceeding Rs 1.3 lakh crore, positioning it as the fourth-largest revenue-generating entity within the Tata Group. This performance contrasts sharply with the struggles faced by other units and underscores the uneven nature of the conglomerate’s current financial health. Chandra’s tenure has already come under scrutiny, particularly regarding his handling of the Tata Digital division. The acquisition of BigBasket, a move intended to bolster the group’s presence in the fast-growing quick commerce sector, proved costly. By 2026, BigBasket held only 4-5% of the market share, significantly lagging behind competitors such as Blinkit, which controls over 40% of the segment. Analysts attribute this shortfall to delayed entry and insufficient differentiation in the offerings of Tata Digital’s products, including its “Neu” super app, which has yet to make a substantial impact on consumer behavior. Satish Meena, founder of Datum Intelligence, noted that Tata Digital lacks a clear value proposition for users, which has hindered its ability to compete effectively in the crowded digital marketplace. With Amazon and Flipkart intensifying their efforts in the sector, the pressure on Tata Digital to innovate and deliver results has only increased. The government’s interest in the Tata Group extends beyond its financial performance. As India seeks to reduce dependence on foreign suppliers in critical industries, the conglomerate has become a pivotal player in developing domestic capabilities in aerospace and defense. Projects involving the manufacture of military aircraft and the development of drones and rocket launch systems highlight the strategic importance of the Tata Group. However, the success of these initiatives hinges on the stability of the parent company, which must address its internal financial challenges before it can fully capitalize on these opportunities. With the stakes high and the path ahead fraught with uncertainty, Chandra’s leadership will be tested in the coming months. His ability to steer the group through its current difficulties, and to transform its struggling divisions into profitable enterprises, will determine whether the Tata legacy continues to thrive in the evolving economic landscape of India.