'Challenging times ahead': Chandrasekaran warns Tata executives of supply disruptions, rising costs amid West Asia war

Natarajan Chandrasekaran has cautioned top executives across the Tata Group to prepare for a more challenging business environment as the ongoing conflict in West Asia disrupts supply chains and adds to cost pressures, TOI reported citing people familiar with the matter.

At a review meeting held on Thursday, the chairman addressed more than 30 chief executives and managing directors of group companies, outlining the potential fallout of the crisis and the need for preparedness across operations.

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A key concern flagged during the meeting was the safety and movement of employees in the region. The group has over 10,000 personnel based in West Asia, including staff from Voltas, Tata Consultancy Services, Indian Hotels Company Limited, and Titan Company, including those associated with its jewellery brand Damas. Steps are being taken to facilitate their return where required, TOI reported citing a source.

Executives noted that supply chain disruptions and rising commodity prices are likely to weigh on demand while pushing up operating costs, leading to pressure on margins. For several businesses, this could translate into production levels falling short of installed capacity.

“The chairman advised to be prepared for tougher business environment marked by demand slowdown, project delays, driven by supply chain disruptions and cost increases due to oil price, shortages, currency movements, logistics costs, among others,” the source added.

Chandrasekaran also urged companies to focus on conserving cash and managing liquidity prudently, while carefully evaluating the timing of new and ongoing projects. He advised executives to reassess project timelines where necessary and prioritise financial discipline.

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In addition, he called for strengthening cybersecurity preparedness and network resilience, alongside implementing cost optimisation programmes with clearly defined targets. Employee welfare was another area of emphasis, including the need to support temporary staff and address stress and anxiety among employees and their families in the affected region.

“Further, we need to immediately address anxiety and stress-related issues of our employees and their families in the region.”

The group has already facilitated the return of some employees and their families transiting through the UAE, with support from Air India.

Looking beyond the immediate crisis, Chandrasekaran is also understood to have urged leaders to stay prepared for a recovery phase once conditions stabilise. “You must be in a state of readiness — be agile; do not lose momentum,” he told executives.

With inputs from TOI