Tata Sons, the holding company of the Tata Group, has seen an annual 13 per cent dip in the market value of its investments to ₹11.2-lakh crore in FY23, its annual report showed.
The combined market capitalisation of the group also saw a fall to ₹20.7-lakh crore from ₹23.6-lakh crore a year ago.
A look at the stock price performance of the individual companies in the group shows that during the last financial year, a majority of the companies showed a fall, the most prominent among them being Tata Steel, Tata Consumer Products, TCS, Tata Teleservices (Maharashtra), Tata Power, and Tata Elxsi.
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A slowdown in the US as well as Europe has had an impact on the software companies in the pack, putting their profitability metrics under pressure. For most of 2022 and the early part of 2023, high inflation, higher input costs, and geopolitical tensions in the West also led to the operations of some of the companies being affected while market sentiments were subdued. The result was an erosion in the share prices of group companies in the fiscal year, though they may have recovered from their lows.
As the holding company of the Tata group, the primary source of Tata Sons’ inflows are dividends received from Tata companies, which are occasionally supplemented by the sale of investments.
The company said its performance in the year under review was the best ever, with a 45 per cent rise in revenue to ₹35,058.5 crore and profit after tax rose 29 per cent year-on-year to ₹22,132.4 crore on a standalone basis.
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Its consolidated results showed PAT fell over 30 per cent to ₹28,211 crore, while revenue rose over a third to ₹4.2-lakh crore.
India growth opportunity
In its management discussion and analysis for the year, the company said it was investing to leverage the India growth opportunity in industries driven by global energy transition trends, the creation of a diversified and resilient supply chain, and AI and data-led transformation of businesses.
The last two-three years have seen disruption in global supply chain, partly due to Covid, the impact of lockdowns in China, and then the Russia-Ukraine war. Indian companies are increasingly investing in diversifying their sourcing requirements as well as creating a shock-proof supply chain system.