Tata group’s revenue falls 4.6% on decline in commodity prices


Mumbai: The Tata group’s revenues fell 4.6% from a year ago in fiscal 2016 to $103 billion (Rs.6.72 trillion) owing to a steep decline in commodity prices, the salt-to-software conglomerate said in a statement on Friday.

The drop in the dollar value of revenues is largely owing to global political uncertainty, a steep reduction in commodity prices and commodity volatility, clarified Tata Sons, the promoter of major operating companies in the group.

In rupee terms, revenues rose 2.12% to Rs.6.72 trillion.

The group closed financial year 2016 with a market capitalization (of its 29 listed companies) of Rs.7.7 trillion ($116 billion). That was a 7.4% decline over the previous year and compares with the 9.4% fall in the Sensex, India’s benchmark equity index.

The group is currently looking to sell its UK steel assets, including the Port Talbot steel-making facility in Wales, in a bid to cut losses that have been piling up because of a crash in steel prices and competition from cheap imports, especially from China.

World steel production doubled between 2000 and 2015, with China accounting for half of it, and the slowdown in the world’s largest commodity consumer has hurt prices.

Moreover, Tata Sons is also in the middle of settling a $1.17 billion arbitration award to NTT DoCoMo Inc., which is seeking compensation for exiting Tata Teleservices Ltd.

Cyrus Mistry, group chairman, while addressing the senior management at an annual leadership conference on Friday, said 16 companies in the group reported a turnover of at least $500 million in 2015-16.

Ten of these had billion-dollar revenues or more. At around $70 billion, revenues from businesses outside India constituted around 69% of the group’s turnover, Mistry added.

He also said that the group’s $9 billion investments in 2015-16 took the total capital spend over the last three years to $28 billion.

“This substantial capital investment programme has delivered a number of growth-oriented projects, including the Tata group’s largest greenfield infrastructure project, the new steel plant at Kalinganagar in the Indian state of Odisha, which commenced commercial production on 25 May 2016,” Tata Sons said.

Mistry also said that the Tata group has doubled its published patents in two years from about 3,500 at the end of calendar year 2013 to about 7,000 at the end of 2015. About 2,000 patents, across areas from computation and data processing to engines and hybrid fuels, were filed in 2015.

This conference is held every year on 29 July to commemorate the birthday of former Tata Sons chairman JRD Tata.

In his speech, Mistry also outlined the critical enablers which would help the group achieve its vision of serving a quarter of the world’s population by 2025 and ensuring that Tata companies are among the top 25 in terms of market capitalization.