Led by Tata Motors and Tata Consultancy Services (TCS), the combined revenue of the Tata group’s listed firms crossed the Rs 10-trillion mark for the first time, in 2022-23.
The group’s 14 key listed companies in which Tata Sons holds a direct equity stake reported a combined revenue of Rs 10.07 trillion in FY23, up 15.3 per cent from Rs 8.73 trillion in FY22.
The combined net profit of these companies was, however, down 10.6 per cent year-on-year (YoY) at Rs 66,670 crore in FY23, from a record high of Rs 74,540 crore in the previous financial year, when the profit had jumped 156 per cent YoY, aided by Tata Steel’s strong showing.
If all the listed Tata group companies are seen as a single business entity, it would be the 64th-biggest corporation globally with revenue of $125 billion, behind Russia’s Lukoil which reported revenue of $125.3 billion on a trailing 12-month basis, but ahead of Japan’s Honda Motor Company (annual revenue at $124.9 billion), according to data from Bloomberg.
The analysis is based on rupee-dollar exchange rate of 80.56 to a dollar for FY23 on average.
The central government – on the back of public sector undertakings (CPSUs), such as Indian Oil, ONGC, NTPC, and State Bank of India – remains the biggest business group in the country in terms of revenue and profit.
On a combined basis, for FY23, listed CPSUs reported Rs 52 trillion in revenue and Rs 3.41 trillion in net profit.
Even if one excludes BFSI (banking, financial services, and insurance) entities, non-BFSI CPSUs reported a combined revenue of Rs 30.5 trillion and net profit of Rs 1.69 trillion for last financial year.
The analysis includes the trailing 12 months numbers of CPSUs that are yet to declare their results for the January-March 2023 quarter (Q4FY23).
But Tata remains the biggest business group in the private sector in revenue terms, ahead of the Mukesh Ambani-controlled Reliance Industries (RIL).
RIL reported a consolidated revenue of Rs 8.91 trillion in FY23, up 24.1 per cent from Rs 7.18 trillion a year ago.
In comparison, its consolidated net profit was up 9.9 per cent to Rs 66,702 crore in FY23 (from Rs 60,705 crore a year ago), which is a tad ahead of the Tata group’s aggregate profit of the 14 companies.
Overall, there are 26 listed firms in the Tata group, but 12 of them are subsidiaries and associates of key group companies, such as Tata Steel, Tata Motors, Indian Hotels, Tata Consumer, and Tata Chemicals.
This analysis excludes the revenue and profit of these subsidiaries and associates to avoid double counting.
Similarly, there are 10 listed companies in the Mukesh Ambani group, but nine of them are subsidiaries and associates of Reliance Industries.
In the past five years, the Tata group companies’ combined revenue grew at a compound annual growth rate (CAGR) of 8.6 per cent, from Rs 6.65 trillion in FY18.
In the same period, the group’s net profit clocked a CAGR of 7.9 per cent, from Rs 45,677 crore in FY18, indicating a steady decline in the aggregate operating and net margins.
The group’s revenue, however, grew at a slower pace when compared to India's gross domestic product (GDP) in the past five years.
India's GDP at current prices grew at a compound annual rate of 9.7 per cent since FY18, rising from Rs 170.9 trillion to an estimated Rs 272 trillion in FY23.
As a result, the group’s share in India’s GDP (based on revenue) declined to 3.7 per cent in FY23, from 3.9 per cent in FY18 and a high of 5.12 per cent in FY14.
Among individual companies, Tata Motors accounted for 54 per cent of the incremental rise in the group’s revenue in FY23.
The global automaker is followed by TCS at 24.8 per cent share, and Tata Power at 10.8 per cent. For FY23, Tata Motors’ consolidated revenue was up 25.9 per cent YoY to Rs 3.52 trillion, while TCS’ was up 16.9 per cent YoY to Rs 2.29 trillion and Tata Power’s surged 31 per cent YoY to Rs 60,671 crore.
In contrast, Tata Steel was a laggard; there was a 3.5 per cent YoY decline in revenue to Rs 2.45 trillion in FY23.
The decline follows sharp growth in the previous year, which was aided by record-high metal prices.
These three companies – Tata Motors, Tata Steel, and TCS – accounted for 82 per cent of the Tata group’s revenue in FY23.
TCS remains the group’s cash cow, accounting for 63 per cent of the combined net profit in FY23, even as Tata Motors saw the biggest positive swing in earnings equivalent to Rs 13,856 crore -- from a consolidated net loss of Rs 11,441.47 crore in FY22 to a net profit of Rs 2,414.29 crore in FY23.
Tata Steel was a laggard with a 78 per cent YoY decline in its net profit in FY23, thanks to the fall in metal prices.
In FY22, the company’s consolidated net profit shot up 5.4 times to Rs 40,154 crore, from Rs 7,490 crore in 2020-21, led by record steel prices.