Air India, Tata Digital losses push Tata Sons’ new ventures towards Rs 29,000 crore hit: Report

A clutch of new businesses within Tata Sons is projected to post a combined loss of up to Rs 29,000 crore in FY26, far exceeding an earlier estimate of Rs 5,700 crore, according to a report by The Times of India’s Reeba Zachariah, based on internal estimates.

Losses in the first nine months of FY26 alone have already touched Rs 21,700 crore, well above the full-year FY25 figure of Rs 16,550 crore, driven largely by Air India, Tata Digital, Tata Electronics and Tejas Networks. While losses had narrowed between FY23 and FY24, they rose again in FY25 and have surged further this fiscal, pointing to an uneven but rising trajectory.

The widening gap between projections and actual performance also contributed to the deferral of chairman Natarajan Chandrasekaran’s third-term reappointment at the February board meeting. He is expected to present a roadmap in June to rein in losses: a key concern flagged by Noel Tata.


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Tata Digital: mounting losses, lagging execution

Among the group’s newer bets, Tata Digital has emerged as a central concern. Envisioned in 2019, the platform—which houses BigBasket, Tata 1mg, Croma, Tata CLiQ and Tata Neu, has yet to turn profitable despite investments exceeding Rs 24,000 crore.

Its FY26 consolidated losses are estimated to cross Rs 5,000 crore, the highest since inception. In the first nine months alone, losses have already surpassed Rs 3,750 crore, overshooting initial full-year projections.

“While the gestation argument is real, there were missteps: leadership instability, slow product improvements, and a loyalty programme mistaken for a growth engine,” Thomas Kuruvilla, managing partner of Arthur D Little, told ToI.

He added that rivals outpaced BigBasket not on brand but on execution. “They won on dark store density and delivery speed, the unglamorous infrastructure work Tata Digital underinvested in.”

The company’s FY25 losses of Rs 4,610 crore were led by BigBasket (Rs 2,007 crore), followed by Croma (Rs 1,091 crore), Tata 1mg (Rs 276 crore) and Tata CLiQ (Rs 14 crore), with a similar trend expected in FY26.

“Unlike its competitors, BigBasket is not that visible to customers. A lot of its customers have moved to other platforms. Tata, it seems, is not keen on spending more money on it and is instead focusing on profitability,” said Satish Meena, founder at Datum Intelligence.

Observers have also questioned Tata Digital’s broader role, arguing that several of its services could be run more efficiently by individual group companies. Some see the platform as “largely a loyalty programme” that is burning nearly Rs 5,000 crore annually.

Air India: the biggest drag on finances

Despite concerns around Tata Digital, Air India remains the single largest contributor to losses. The airline’s FY26 losses are projected to reach Rs 20,000 crore—ten times higher than an earlier estimate of Rs 2,000 crore—with Rs 15,000 crore already recorded in the first nine months. This compares with Rs 11,000 crore in FY25.

Kuruvilla cautioned against placing the entire burden on management. “Holding management fully accountable for Air India's FY26 losses would be ‘unfair and analytically lazy’.”

He pointed to multiple external pressures: Pakistan’s airspace closure, elevated crude prices above $100, and the Ahmedabad flight crash, describing the situation as a “perfect storm”.

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“The real question is not whether management caused the losses-they didn't-but whether they built enough financial resilience to absorb shocks of this scale. That answer is less comfortable.”

At the same time, he drew a distinction between external challenges and service quality. “While ‘geopolitics excuses the financials, it does not excuse the customer experience’.”

“Four years into private ownership, service consistency should not still be generating the same complaints it inherited from the govt. ‘The external environment may be brutal, but inside the cabin, that is entirely Tata's problem to own,’” Kuruvilla said.

Chandrasekaran under pressure

The scale of losses across new ventures has intensified scrutiny of Natarajan Chandrasekaran’s strategy, particularly as the group balances long-term bets with near-term financial strain.

The delay in his reappointment reflects board-level unease over execution gaps and rising losses. A detailed turnaround plan is expected at the June board meeting, with a sharper focus on cost control and operational discipline.

Meanwhile, other ventures are also under watch. Tata Electronics is projected to post a Rs 3,000 crore loss in FY26, while Tejas Networks may swing to a Rs 1,000 crore loss from a Rs 500 crore profit a year earlier.

Neither Noel Tata nor Tata Sons responded to TOI’s emailed queries.

(With inputs from ToI's Reeba Zachariah)