Tata group eyes big bang from defence, aerospace

The Tata group’s defence and aerospace revenues are expected to touch ₹2,650 crore in the current financial year, clocking an increase of 7.5 per cent from last year.

Over the last five years, revenue from the defence and aerospace business of the Tata group has grown at 18 per cent, said Tata executives.

Even as Tata group Chairman Cyrus Mistry identified defence and aerospace as one of the four growth clusters at an annual group leadership conference in 2014, several Tata companies operating in allied spaces have been tapping the inherent synergies across group companies, and harnessing the prevalent opportunities.

This has paved the way for group companies to aggressively bid for global defence contracts, said Mukund Rajan, Member - Group Executive Council, and brand custodian, Tata Sons. He was speaking at a media roundtable in Mumbai, on the various Tata companies in the defence and aerospace sector.

Sukaran Singh, Chief Executive Officer, Tata Advanced Systems Ltd (TASL), said the current order book size of the Tata group in the defence and aerospace sector is in excess of ₹10,500 crore. He added that a substantial amount of this was for exports.

Regarding the Tata-Boeing joint venture for the manufacture of aerostructures, Singh said deliveries of the Apache helicopter would start by 2018. The Apache AH64 fuselage was the first work package won in global competition, and the project is slated to start in the second quarter of 2016.

Unveiling its plans for the defence sector, including the investments that Tata companies have made in defence and aerospace, Tata officials highlighted the potential for growth. Pointing out that Tata Motors’ defence business is likely to grow at a CAGR of 10-12 per cent. They said Tata Motors has participated in a domestic defence contract worth ₹100 crore to supply vehicles. Tata Motors has orders in hand for about ₹900 crore, and does about ₹1,000 crore business a year for all its specialist vehicles related to the defence and security forces.

Tata Motors also has substantial investment in the Light Armoured Mobility Vehicle (LAMV) programme, in collaboration with the Ordinance Factory Board, worth around ₹700 crore.

Vernon Noronha, Vice-President, Defence and Government Business, Tata Motors, said Kestrel, the armoured amphibious platform, is set to undergo trails soon. The Kestrel is a wheeled, armoured personnel carrier, jointly developed by Tata Motors and the Defence Research and Development Organisation (DRDO). It is aimed at replacing the Soviet-era BMPs, an amphibious infantry fighting vehicle, and APCs (armoured personnel carrier) in service with the Indian army.

The Kestrel platform is to be offered by the DRDO to the mechanised forces of the Indian army, for user assisted technical trials.

The group is banking on winning a ₹60,000-crore plan to design and build a FICV under the Make in India programme. The Defence ministry is to reimburse 80 per cent of the cost to design and develop the FICVs.

Tata Motors has teamed up with Bharat Forge Ltd and General Dynamics Land Systems in the USfor the FICV. While Tata Motors will lead the consortium, Bharat Forge will be a partner, and General Dynamics will bring in its expertise in combat vehicle platforms, Noronha said.