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Rupee fall pushes Tata group out of $100-billion club

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UK's Tesco eyes 50:50 supermarket JV with Tata
UK's Tesco eyes 50:50 supermarket JV with Tata

Salt-to-software conglomerate Tata group’s combined turnover has slipped below $100-billion mark due to a fall in rupee, despite an over ten per cent growth in total revenue when measured in Indian currency.

Tatas have, however, emerged as the country’s first business house to record an annual turnover of more than Rs. five lakh crore in rupee terms, while its headcount rose by nearly 88,000 persons to over 5.4 lakh employees in 2012-13.

The group, with over 100 operating companies, saw its total revenue rise by 10.8 per cent to Rs. 5,27,047 crore in last fiscal, from Rs. 4,75,721 crore in previous year.

However, a fall of over 14 per cent in rupee value against the US dollar during the fiscal 2012-13 resulted into Tata group recording a fall of over three per cent in its US dollar revenue during the year.

In US dollar terms, Tatas’ total revenue stood at $96.79 billion in 2012-13, down 3.3 per cent from $100.09 billion in the previous year, according to latest financial information published by the group.

Last year, Tatas had become the country’s first and only business house to cross the turnover of $100 billion.

The group has used an exchange rate of Rs. 54.45 for one US dollar for 2012-13, and that of Rs. 47.53 for previous year.

The revenue figures for group companies are consolidated and net of excise duty, wherever applicable.

While the group has not disclosed its total profits for the latest fiscal (2012-13) so far, its profit after tax had slipped by 9.4 per cent to $5.23 billion in 2011-12.

The revenue in the fiscal 2011-12 had risen by about 20 per cent from $83.3 billion in the year 2010-11.

In rupee terms, the revenue growth was higher at 25.3 per cent in 2011-12 and fall in profit was lower at 4.5 per cent.

The group’s international revenue continues to account for more than half of total worldwide turnover and rose by 2.7 per cent to $60.7 billion in 2012-13. Besides, its net forex earnings almost doubled to $3.05 billion in 2012-13, from $1.59 billion in the preceding fiscal.

Its total assets, however, fell marginally by 1.3 per cent to $107.17 billion in 2012-13. The group currently commands combined market capitalisation of close to $100 billion with 32 listed companies.

The international operations and overseas acquisitions have played a significant role in the group’s revenue growth in recent years. The group turnover had crossed Rs. one lakh crore mark in 2006-07, while it stood at little below Rs. 50,000 crore level in 2001-02.

The group is present in more than 80 nations and markets across Asia, Africa, America, Europe and Australia.

Tatas have made a number of high-profile takeovers abroad, including high-profile acquisitions like Jaguar and Land Rover in 2008 and Corus Steel in 2007, and made an offer last week to acquire US-listed Orient Express, which runs an iconic chain of hotels and luxury trains.

Among its key businesses, the group is present in IT, steel, automobile, power, hospitality, telecom, chemicals, consumer goods, retail, engineering and chemicals sectors. The group has announced its re-entry into aviation business and has also applied for a banking licence.

Out of its total headcount of 544,502 persons, communications and information systems business accounted for over three lakh employees or over 56 per cent of total employee strength, followed by about 15 per cent each in materials and engineering sectors.

Founded by Jamsetji Tata in 1868, the group saw a change of guard in December 2012 with Cyrus Mistry taking over as its Chairman from iconic industry leader Ratan Tata. Every Tata company or enterprise operates independently and each of these companies has its own board of directors and shareholders.

There are 32 publicly listed Tata companies with a combined shareholder base of nearly four million investors.

Some of the major Tata firms include Tata Steel, Tata Motors, Tata Consultancy Services (TCS), Tata Power, Tata Chemicals, Tata Global Beverages, Tata Teleservices, Titan, Tata Communications and Indian Hotels and many of these occupy leadership positions in their respective businesses.

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