There have been many sermons served in print, mostly by the former grandees that occupied the privileged floor in Bombay House, that serving the national interest and philanthropy being the heart of the Tata business model, applying cold commercial calculations may fit poorly to evaluate the group’s performance.
A passage extracted from one such written, picked at random, may help land this thought process better-
‘I feel that the purushartha of Tata (its purpose) has been pretty much maintained for over a century and a half: To serve the nation and society through enterprise. I respectfully disagree with the view that Tata needs to reassess what it stands for (Business Standard, August 20). Investment in, for example, electric vehicles, batteries, defence, and chips do prioritise national needs. Air India faced an unprecedented bunching last year of high prices of aviation turbine fuel, no-fly over regions, and the unfortunate Ahmedabad accident. The foray into smartphones and semiconductors would have pacified the atma of the late FC Kohli, who bemoaned that India (and Tata) had missed the microelectronics revolution. And all this without affecting the expenditure on philanthropy!’
Quite legitimately, financial metrics alone may be inadequate to measure the value of an enterprise to society at large. Market capitalisation, in isolation, may be even more misleading as a yardstick.
Yet, over two or three decades, a sustained growth in the market value is difficult to disregard as an indicator of the commercial strength of a business and the value that investors and society attach to its mission and purpose.
Long-term business value, reflected in sustained investor confidence, is significantly driven by factors like a viable business model with a long-term competitive advantage; the business fulfilling a larger societal need; fair treatment of the stakeholders; respect for laws; ethical financial management; effective succession planning and robust governance.
There is unlikely to be an example of an enterprise that failed consistently on even one of these criteria and, yet, prospered in the long run. A long-standing business may slip at times, but will set right the course quickly and avoid repeating any mistake.
Reflecting the above sentiment, and the curiosity to understand as to what this group has delivered in the long run led to looking at the market valuation of the eight of its major companies listed on the stock exchanges. (Why only eight and not more- anyone can improve on this exercise.)
The approximate valuation of these, based on stock market data on 24 August 2026, totals to about ₹22(+/-)tn (trillion) - Tata Steel (2.3), Tata Motors (commercial vehicles) (1.7), Tata Motor (passenger vehicles) (1.1), TCS (8.2), Trent (1.5), Titan (4.5), Tata Consumer (1) and Tata Power (1.2).
Looking at this in isolation may shed little light. A comparator is required to make better sense of this. In terms of the size and diversity, Reliance Industries is the closest.
Together with the current value of Jio Financial Services that separated from the parent, the combined valuation is only a shade lower than the above.
Both sides sport a mix of manufacturing, infrastructure and services. TCS significantly tilts the balance, but excluding it may make this exercise illusory.
The individual businesses in the two conglomerates may be different, but overall, they operate in a similar environment, both within and outside the country.
What lends some credibility and logic to this exercise is the similarity in the turnover between the two over the full 25-year period, as shown below. Starting at FY00-01, an intermediate point at FY13-14 and the destination, FY25-26
The compounded annual growth rate (CAGR) is compared for the first 13 years (FY01-FY14) and the subsequent 12 years. (Since TCS started publishing figures only from FY04-05, its number has been taken for convenience in 2001 itself.)
(No adjustment has been made for the intercompany transactions within the Tata entities. Only the figures as per the consolidated accounts have been used in all cases. Figures of Jio Financial have been ignored being not material. It is also important to bear in mind that Reliance underwent a major restructuring in about 2005/ 2006)
The next indicator of profit before tax (PBT) also shows a rare convergence at both the start and at the terminal year.
The profit growth of the Tata-eight is particularly low in the second period which has been a matter of contention in recent times as brought out in what BS carried:
'N Chandrasekaran's remuneration at Tata Sons grew at a much faster pace than both Tata Sons' consolidated adjusted net profits (that includes the earnings of its listed and unlisted subsidiaries) as well as the combined net profit of the group's listed companies.
Chandra's annual remuneration, including base salary and commission, grew at a compound annual growth rate (CAGR) of 14.1% in the last eight years -- growing from ?55.1 crore in FY17-18 to ? 158.7 crore in FY25-26.
In the same period, Tata Sons' consolidated adjusted net profit declined by 11.9% cumulatively to ? 17,923 crore in FY25-26 from ?20,344 crore in FY17-18. The combined net profit of the group's listed companies in the period grew at a CAGR of 9.2% from ?44,786.5 crore in FY17-18 to ?90,698 crore in FY25-26.
His salary also beat Tata companies' shareholders as the group companies' combined market capitalisation grew at a CAGR of 11.9% between FY17-18 and FY25-26.'
-- Krishna Kant, Business Standard (12 August 2026)
The third indicator considered is the investment in (fixed) assets. (The figure includes intangibles, as both have a significant component. All financial investments held are excluded from this.)
The difference in the addition to assets in the second period is quite substantial. Tata’s investments in unlisted entities could not be captured in this.
Reliance has raised significant capital, both equity and debt, in the second period, the equity and reserves moving from ₹2tn (FY13-14) to about ₹11tn (25-26) and debt at the same time from ₹1.3tn to nearly ₹4tn. The Tata-Eight has a lower capital employed, with the equity+ reserves of ₹4.2tn and debt of ₹2.7tn by FY25-26.
The general thrust about Tata’s larger goal of serving society and building the nation’s industry as a differentiator may be valid equally for many other companies that have stayed relevant over the years and taken significant risks to address gaps in critical needs of the country, whether in goods or infrastructure.
Equally, many examples can be given of business groups that have a record of good governance and optimally satisfying different stakeholders’ interest over a few decades.
No business can grow without timely infusion of capital, the servicing of which will require it to be profitable. Social good can be integral to the business model but not the sole objective which only a charity can meet.
The Tata group’s differentiated ownership structure, with charitable trusts as its ultimate shareholders, does not dispense with the need for prudent management of individual businesses or disciplined capital allocation. The concept of a charity holding shares may be less prevalent in India due to historical reasons, but quite common in Western economies.
Some of these arguments, particularly those seeking an exemption from listing for Tata Sons and those that followed the recent debate over the succession of its chief executive officer (CEO), could, nevertheless, be read as providing a rationale for looking past the underperformance of some newer investments, as well as the questions that have arisen around the trusts and the governance of the holding company.
The best way for the Tatas to remain among the country's most respected business groups is perhaps to embrace greater public accountability for both business performance and governance, rather than seek exemptions from the scrutiny that comes with them.
(
Ranganathan V is a CA and CS. He has over 45 years of experience in the corporate sector and in consultancy. For 17 years, he worked as Director and Partner in Ernst & Young LLP and three years as a senior advisor post-retirement, handling the task of building the Chennai and Hyderabad practice of E&Y in tax and regulatory space. Currently, he serves as an independent director on the board of four companies.)
However, TATA purchase of Air India was probably a over magnanimous ''nationalistic' purchase and has not been commented on leaving a big hole in the conclusions.
However, TATA purchase of Air India was probably a over magnanimous ''nationalistic' purchase and has not been commented on leaving a big hole in the conclusions.