THERE WILL BE PRUNING OF THE TATA PORTFOLIO, SAYS CHANDRA
NEW YORK: Emphasis in gt hat there will“definitely” be pruning of the Tata portfolio, Tata Sons chairman Na tara jan Chandra seka ran has said the company will not exit a business “just to get a headline”, but only when it is certain that it is not getting returns from it.“Tataisa$100 billion group. To get to the next level, we need scale. We can’ t do it with multiple small companies; we need top companies. I am not saying specifically that all companies need to be No. 1 or 2 [in their sectors], but we need to have top companies ,” Chandra seka ran said in an interview to Fortune magazine.
“We won’t exit a business just to get a headline. But we will exit if we aren’t getting returns today and if we don’t think we’ll get them tomorrow. I have thought a lot about this. We’ll definitely prune the portfolio.”
The report added that Chandrasekaran’s colleagues and investors hope he can transfer to there st of the Tat a group some of the “digital magic” he brought to TCS, where he tripled sales and profits during his seven years as CEO .“One of my key messages is that we’re going to look at performance for every operating company—growth rates, profitability, return on capital ,” he said. “You can’t perform if you’re not fit. If you want tor una six-minute mile, you have to bring your weight down.”
Chandra seka ran took over as chief of the holding company of the multinational conglomerate in February. He is the first nonParsi chairman of the 150-year old Tata Group.
The report added that Chandrasekaran isn’t pushing significant changes to the reporting relationship with the trusts. “I am not briefing [them] on what we’re doing with every single company. But they are the primary shareholders for the group. I don’t think there is any conflict in keeping them informed.”
On Nano, Chandrasekaran stressed that Tata Motors will have other priorities .“Passenger car sales are small, and within that, the Nano is even smaller. I don’t think shutting down the Na no plant is a decision the team will make...You know the corporate world. If you are asking whether I feel like I have as much power as any other CEO, the answer is yes. But it’s a process. It’s not like I can get up in the morning and say, ‘Hey, I want to exit financial services.’
On prospects for Tata Sons’ relationship with the family of Cyrus Mis try—the former chairman of Tat a Sons who was unceremoniously ousted in October last year—Chandra seka ran said he cannot talk about the issue. “It’s in the courts; I can’t talk about it. I don’ t know much about the history. We’ll let the court case come to its conclusion,” he added.