TATA UNDER NON-TATA How profits have rebounded

THREE years into reign of chairman Cyrus Mistry — the first person outside of Tata Group’s founding family in more than seven decades to run India’s largest conglomerate — his efforts to cut money-losing businesses and reduce costs are taking form.

Total operating profit at 25 listed Tata companies, the last of which reported last week, rose about 29% in the three years ended March 2016 and combined revenues climbed 25%, according to Bloomberg data. Those growth figures edge out the 23% expansion in the country’s gross domestic product during that period. “Mistry’s efforts to boost profits are bearing some fruit,” said Jagannadham Thu nu gun tl a, head of fundamental research at Karvy Stock Broking in Hyderabad.

The market value of Tata’s 25 listed companies has risen 8.7% to R8.27 lakh crore this year as of Monday, outpacing the 0.7% rise in the benchmark S&P BSE Sensex’s market cap.

The group’s champion has been software exporter Tata Consultancy Services, India’s largest company by market value, which has seen operating profits surge 69% during that period. That helped Mistry weather through losses at the group’ s steel and telecommunications businesses, while getting more ammunition to chip away at the conglomerate’ s $33 billionin debt, the bulk of which was accumulated in a decade-long global spending binge under his predecessor. Mistry’s emphasis on trimming, rather than acquiring, is a reversal of his predecessor’s expansion drive, which backfired when falling prices pushed Tata Steel into losses after losses. Mist ry’ s predecessor, Rat an Tata, increased debt 11-fold in his final 10 years as he expanded abroad, acquiring European steelmaker Corus Group and marquee brands such as Land Rover, Jaguar, Tetley tea and New York’s Pierre hotel.