Tata group profit jumps 5x in six years as market value triples amid big bets on Air India, semiconductors & digital

Mumbai: Tata Group companies tripled in market value and profit rose more than fivefold in six years as the country's biggest conglomerate funded India's biggest private-sector bets in aviation, semiconductors, batteries and digital commerce - businesses that together still lose nearly Rs 30,000 crore annually.

Group holding company Tata Sons reported a 22% increase in FY26 profit, driven by investment gains and stronger earnings from its portfolio companies, in its annual report. In his letter accompanying the report, chairman N Chandrasekaran defended continued investments in loss-making businesses such as Air India and Tata Digital as long-term strategic bets. ET first reported the news online on Monday.

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Tata Sons posted standalone net profit of Rs 31,961 crore for the year ended March, up from Rs 26,232 crore a year ago, while revenue rose 9.1% to Rs 42,367 crore. The board suggested a dividend of Rs 1,10,717 per share.

At the group level, revenue rose 7.8% to Rs 16.24 lakh crore and profit surged 52% to Rs 1.71 lakh crore. Air India remained group's biggest drag, posting a net loss of Rs 22,238 crore in FY26.

'Building Blocks for India's Future'
Chandrasekaran framed the group's investments in semiconductors, batteries, aviation, telecom equipment, defence manufacturing and AI as nation-building initiatives designed to help India achieve technological independence.

"We are building for the India of 2047" and "the next industrial revolution is being designed and built right now, and its building blocks are silicon, connectivity, energy and security," Chandrasekaran said.

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Tata Digital widened its loss to Rs 4,974 crore from Rs 4,610 crore a year earlier, while battery venture Agratas lost Rs 1,101 crore and Tata Electronics reported a loss of Rs 1,611 crore.

Revenue is "2.1x and profits are 5.4x their FY20 levels, reflecting sustained and significant turnaround efforts across the institution," Chandrasekaran said.

One of the agenda items at the forthcoming Tata Sons annual general meeting (AGM) is the reappointment of Chandrasekaran as a director. ET had previously reported the FY26 performance and AGM agenda. Chandrasekaran's remuneration remained almost unchanged, up 1.8% at Rs 158.66 crore in FY26, as a higher salary component offset unchanged commission of Rs 140.69 crore, according to the Tata Sons annual report.

The commission and sitting fees remained unchanged which is an estimated 89% of the salary.

Challenging year
Chandrasekaran said Air India faced "the most challenging year" because of airspace closures, fuel price increases linked to the West Asia conflict, foreign exchange fluctuations and the Ahmedabad crash.

Despite this, customer satisfaction and operational performance had improved, with Air India achieving the country's best on-time arrival performance in June 2026 and net promoter scores improving from -35 in FY23 to +42.

"Air India's transformation must be seen as a five-to-10-year journey," given fleet renewal, supply-chain disruptions and the need to overhaul legacy systems and culture, he said. Rebuilding the national carrier would require sustained investment in fleet renewal, technology, training and customer service.

Explaining the losses at Tata Digital, Chandrasekaran said, "The Indian ecommerce market shifted rapidly towards quick commerce, which BigBasket is adapting to."

Slow progress
While acknowledging that Tata Digital reported a loss of Rs 4,974 crore, he added that "Tata Digital's ambitions are great and are beginning to show progress."

The business has scaled to gross merchandise value of Rs 46,515 crore within four years, while universal app Tata Neu is being refocused on financial services, loyalty and payments. It plans to increase monthly payment users 10-fold while expanding lending and insurance offerings.

Tata Digital continues to face challenges after rapid changes in India's ecommerce market, he said. In an overview of group companies, Chandrasekaran highlighted Tata Capital's landmark IPO, Tata Motors' demerger of its commercial and passenger vehicle businesses, Tata Steel's record domestic deliveries, Tata Power's expansion of clean energy capacity, Titan's international growth, Tata AIA's market share gains and Indian Hotels' record revenue and profitability.

He also pointed to milestones in defence manufacturing, including the first flight of the "made-in-India" C-295 transport aircraft, the launch of India's first private-sector helicopter final assembly line for the Airbus H125 and Tata Advanced Systems' first overseas defence manufacturing facility in Morocco.

Aggregate revenue rose to Rs 16.24 lakh crore in FY26 from Rs 7.9 lakh crore in FY20, while profit after tax climbed to Rs 1.71 lakh crore from about Rs 31,000 crore. The combined market capitalisation of the group's listed companies expanded to Rs 39 lakh crore from Rs 13 lakh crore in FY20, generating shareholder returns that outpaced the Nifty 50 over the period.