Mistry talks tough, says Tata Group will close down ‘stressed’ biz if needed

MUMBAI: The Tata Group will not hesitate to take tough decisions with stressed group companies, including taking a call on reducing businesses if needed, chairman

MUMBAI: The Tata Group will not hesitate to take tough decisions with stressed group companies, including taking a call on reducing businesses if needed, chairman Cyrus Mistry said on Tuesday. Every individual company within the group needed to earn the right to grow, he added.

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“We should not be afraid of taking tough decisions for the right reasons, with compassion,” the head of the 150-year-old conglomerate said in an interview to an in-house magazine. “I have learned through experience that if you want to do the right thing by all your stakeholders, there are no short-cuts. One needs to confront challenging situations and this would entail hard decisions on pruning the portfolio,” he added.

“We will try and balance our portfolio to ensure that at an aggregate level we are more insulated from business cycles. We will continue to invest in our strong business-to-business enterprises, where we have powerful drivers for long-term value creation. It is not necessary for all our companies to be global leaders, but they should aspire to be leaders in the markets they define for themselves.”

The Mumbai-headquartered group, with interests ranging from salt and steel to cars and software, has been grappling with the impact of a slowing global economy, and has already announced its decision to sell a loss-making steel unit in the UK. The group, which has been targeted by labour unions in the UK, has been working with the government to avoid large-scale layoffs.

However, the company continues to be confident about its international prospects. While acknowledging that the group must make full use of opportunities in India, Mistry reiterated that international revenues are close to 70% of its composite turnover. “We continue to remain open to growth opportunities in India and overseas, through the organic route and acquisitions. The majority of the group’s capital expenditure in the last three years has been in international geographies.” He cited the example of newer markets, including Iran and Myanmar, which have opened up to the group.

At a time of slowing capital investment by most business houses, Mistry said Tatas’ growth has been supported by capital expenditure of around Rs 415,000 crore ($79 billion) in the last decade, with over $28 billion over the last three years alone. The group has been making strong forays into the digital space and has built up expectations of a close alignment with brick and mortar business.