The continued loss of listed companies is a headache for the Tata Group

AHMEDABAD: Nearly a decade after Ratan Tata's retirement from Tata Sons and almost five years after Cyrus Mina's ouster from the group, India's largest business conglomerate, the Tata Group, is still grappling with old problems. Excluding Tata Consultancy Services (TCS), the group's listed companies reported consolidated net losses for the third consecutive year. Excluding TCS, the group's listed companies earned Rs. The net loss was Rs 5,606 crore, up from Rs 50 crore in FY20. More than 2.5 crore.

The group's listed companies, including TCS, had a combined net profit of Rs 3,08 crore in the last financial year, which was slightly less than the Rs 2,6 crore in 2020. The group’s financial position is highly dependent on TCS’s economic performance and cash income. TCS had posted a net profit of Rs 2.50 crore in FY11, which is more than the combined earnings of the group companies.

The group's financial ratio has improved for the third year in a row in FY2021, but Tata's largest companies, excluding TCS, are reaping significant returns on their working capital. Excluding TCS, the return on equity capital of the group's companies was 4.5 per cent, up from 7.5 per cent a year ago.

The combined ROCE of the group, including TCS, was 11.5 per cent as against 10 per cent a year ago. The good news is that for the first time in over a decade, the group's balance sheet has seen a decline in debt. The group's combined debt was 6 per cent lower in FY2021 than a year ago.

Debt has declined for the first time since FY10. The downturn is being spearheaded by Tata Steel, which has taken advantage of the situation to improve its position in the steel sector by repaying about Rs 2,000 crore in the last financial year. As a result, the non-performing loans of group companies fell to Rs 6.5 lakh crore at the end of FY2021. At the end of the financial year 2020, it was Rs 4.5 lakh crore.

Concerns for Tata Motors, Indian Hotels and the Tata Teleservices group. The big losses of these three have been offset by the profits of companies like Tata Steel, Tata Consumer, Walters and Tata Alexi. The group's retail ventures Titan and Trent were affected by the Corona last year. Continued losses to Tata Motors are proving to be the biggest headache for Tata Sons.

This major auto company It accounts for one-third of the group's assets and 50 per cent of the joint borrowing of all listed companies in the group. The main reason for the loss at the group level was the financial problems of Tata Motors and Tata Teleservices. Tata Motors had a net loss of Rs 12.5 crore in FY21.