Can Tata’s Big Bets Pay Off After Chandrasekaran’s Exit?

Natarajan Chandrasekaran, the outgoing Tata Sons’ chairman, had once called his vision for the group “cathedral thinking”—building things whose full potential may take decades to emerge. During his tenure, he laid out plans for more than $120bn of investments across businesses ranging from semiconductors and batteries to electric vehicles (EVs) and aviation.

Tatas have always made such big bets, roughly every decade or two across its 158-year history. Many of these bets looked reckless early on, but they ended up transforming the group itself. And Chandrasekaran has been a part of such big moves over the years.

But when his proposed five-year reappointment came up before the Tata Sons board in February, it did not receive the go-ahead. Six months later, he chose not to seek another term.

A decade ago, Chandrasekaran, who had spent almost his entire career at Tata Consultancy Services (TCS), took over a very different Tata from today. In 2016, when Ratan Tata’s successor hunt ended with Cyrus Mistry and his subsequent ouster, Chandrasekaran was elevated to the Tata Sons board. Then on, he was the frontrunner for the chairman’s post.

Chandrasekaran’s ability to strengthen the present while preparing for the future was a quality he shared with Ratan Tata, according to Thomas Mathew, the biographer of Ratan Tata. A quality that has helped him get the top job.

“Just as Ratan, Chandrasekaran had kept his eye on the future, looking at the digital universe that holds the key to the future success of any business,” Mathew wrote in Ratan Tata: A Life.

Chandrasekaran was handed an empire bleeding money. He streamlined legacy businesses in auto, fast-moving consumer goods (FMCG) and hospitality while building new growth engines in digital, electronics manufacturing, semiconductors and energy storage. Though he has been criticised for burning money, the question now is whether any of these bets can become the next TCS.

Proven Strategy

Judging Chandrasekaran’s bets only through the lens of losses ignores something fundamental about Tatas: some of its money-spinners were equally premature once.

“Tata has long undertaken big, hairy projects that seemed out of proportion at the time,” says R Gopalakrishnan, former executive director, Tata Sons. “Taj Hotels was way ahead of its time in 1902 and took decades before it made money. Tata Steel resulted in a cash crunch in 1922. Tata Chemicals lost money for decades before it was turned around in the 1950s,” he adds.

There are other examples of reshaping legacy conglomerates with new bets. Mukesh Ambani transformed Reliance Industries from an energy-heavy group into one spanning telecom, digital services and retail, launching Reliance Retail in 2006 and Jio in 2016.

Similarly, Kumar Mangalam Birla expanded the Aditya Birla Group beyond commodities into telecom, financial services and retail. Anand Mahindra diversified Mahindra Group beyond auto, tractors and steel into technology, finance, hospitality and real estate.

The common thread is a willingness to make large, long-term bets to create new growth engines, and staying relevant in the changing times. “While individual companies focus on growing existing businesses, the chairman’s role in a conglomerate is to think at least five years ahead and bet in the direction where the world is headed,” says Deepraditya Datta, managing director at HR consultants Senator Executive Search Partners.

Tatas have also always built what India desperately needs, says Arun Maira, a former group executive director, Tata Motors.

Lakmé (1952), for instance, was founded at the request of then Prime Minister Jawaharlal Nehru, who wanted India to have its own cosmetics venture to save foreign capital spent on imports.

The group’s semiconductor ambitions aligned with the government’s vision of a domestic chip ecosystem. Tata Electronics was set up in 2020, as the production-linked incentive scheme for smartphones was launched.

“Tatas are a socialist enterprise. Their philosophy is to ensure that people in your own country acquire skills, earn a livelihood and build their careers. Their trajectory goes along with the country’s trajectory,” adds Maira.

What’s noteworthy is that Tatas’ playbook almost always becomes India Inc’s blueprint. Murugappa is one such example. It entered semiconductors through CG Power in 2024. Similarly, IT firm HCL laid the foundation for a chip assembly and test plant near Jewar, Uttar Pradesh, in 2026.

The Risk-Takers

While Tata’s electronics bet seems to be delivering some results—it’s now the fourth-largest Tata company by revenue (₹1.32 lakh crore)—Chandrasekaran’s other bets are yet to show progress.

Tata Digital, which houses the group’s digital consumer ventures like BigBasket, Tata CLiQ and Tata Neu, has had its losses widening for years and leadership revolving. The losses have jumped from ₹336cr in its first year in 2019–20 to ₹4,974cr in 2025–26. So far, Tatas have infused as much as ₹22,903cr into the entity.

The group’s battery-manufacturing bet Agratas is still in its build-out phase both in the UK and India. The unit is expected to reduce Tata Motors’ import dependence and build an integrated EV supply chain. But it is not expected to come alive before 2027. But these losses have been expected, given the nature of the businesses itself. Air India, on the other hand, has faced a series of setbacks since its acquisition.

The airline, whose homecoming had been much celebrated, has had to contend with operational disruptions. Its losses have jumped to ₹22,238cr in 2025–26, from ₹11,388cr in 2021–22, when Tatas acquired the airline. Chandrasekaran has in fact pegged that the airline would take another decade to turn around.

Analysts and critics acknowledge these issues but slam the chairman for doubling down on his bets without recalibration. This is important as the group’s cash-cow TCS undergoes a revamp led by artificial intelligence (AI) and geopolitical disruptions.

The problem is that Tata Sons has limited independent cash generation with which to fund several of these businesses, points out Karthik Balakrishnan, professor of accounting at Indian School of Business.

“This is where the concentration risk turns from a financing detail into a genuine stewardship red flag,” says Balakrishnan. Adding that early-stage bets need patience, but “patience has to be underwritten by someone’s balance sheet”.

For Tatas, he argues, that burden falls largely on TCS shareholders, as dividends and buybacks from the IT firm have historically contributed to 90-95% of Tata Sons’ revenue. With TCS’ payout to Tata Sons falling 12% in 2025–26, even as Air India, Tata Digital and Tata Electronics needed capital, Balakrishnan warns that “the capital structure funding them wasn’t built with much slack”.

What’s Next?

The question facing the group today is whether the new Tata chairman will continue Chandrasekaran’s investment strategy.

But that answer will depend not only on the successor, but who brings in the successor. Noel Tata, chairman of Tata Trusts, has reportedly been central to the resistance to Chandrasekaran’s reappointment and is expected to play an important role in the appointment.

Noel’s leadership at Trent, Tata’s retail and apparel arm, has demonstrated an emphasis on measured expansion across multiple verticals.

“Chandrasekaran seems to have prioritised strategic relevance and future optionality over near-term capital efficiency. It now needs to be seen if the next chairman continues the growth focus or plays it safe,” says Datta.

Though, bets made by Chandrasekaran are not his alone, points out Gopalakrishnan. “Chandra has taken strategic bets with full support from his board,” he says. In that sense, Noel too is responsible for what happens to these bets.

India Ambitions at Risk?

Tatas’ new bets under Chandrasekaran have woven the group’s future into India’s growth ambitions.

“These investments not only address India’s emerging needs but also position the group to serve rising international demand. Such bold moves were both necessary and inevitable,” says Bharat Wakhlu, former Tata Sons group resident director, now an executive leadership coach.

Their enormous size, he says, “simply mirrors the scale and strategic importance” of the industries themselves, far beyond what might once have been considered traditional Tata investment levels.

It may take a decade to know whether India becomes a major global semiconductor supplier, whether Tata’s battery investments create a meaningful EV supply chain, or whether Air India can become the global airline Tata dreams of. Today, the question for Tatas is whether the group is prepared to stay the course long enough to find out if the bold bets were the right choice.