MUMBAI: Amid financial concerns flagged by Tata Trusts chairman Noel Tata regarding Tata Sons‘ new ventures, the businesses are now estimated to incur a combined loss of Rs 29,000 crore in FY26, sharply higher than an earlier projection of Rs 5,700 crore, according to internal estimates reviewed by TOI.Losses for the first nine months of FY26 have already reached Rs 21,700 crore, compared with Rs 16,550 crore for all of FY25, with Tata Digital, Air India, Tata Electronics, and Tejas Networks accounting for the bulk. After narrowing from Rs 16,550 crore in FY23 to Rs 11,800 crore in FY24, losses rose again in FY25 and have surged further in FY26, reflecting a fluctuating but overall upward trend.The widening gap between projected and actual performance was among the factors behind the deferral of Tata Sons chairman N Chandrasekaran’s third-term reappointment at the Feb board meeting. He is expected to present a plan at the June board meeting to rein in losses at new ventures, a sore point on which Noel Tata has placed much emphasis and for which he has sought a strategy.
Revamp Plan Likely By June After Concerns Flagged By Noel Tata
In particular, the unlisted Tata Digital-which houses BigBasket, Tata 1mg, Croma, Tata CLiQ, and the super app Tata Neu – is emerging as a key concern. Conceived by Chandrasekaran in 2019, Tata Digital has yet to turn profitable, despite Tata Sons investing over Rs 24,000 crore, including acquisitions.Its FY26 consolidated losses are estimated to cross Rs 5,000 crore, the highest since inception. It has recorded losses of over Rs 3,750 crore in the first nine months of FY26, surpassing its initial full-year projection, internal estimates showed. While new ventures typically have a gestation period and require sustained funding, their financials are expected to improve over time, Tata Group observers said. However, Tata Digital’s performance, they added, has lagged over the past three years, with revenue growth of just 10% year on year. It has also seen three CEO changes in its short history.“While the gestation argument is real, there were missteps: leadership instability, slow product improvements, and a loyalty programme mistaken for a growth engine,” said Thomas Kuruvilla, managing partner of Arthur D Little. 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.“Of Tata Digital’s Rs 4,610 crore loss in FY25, BigBasket accounted for Rs 2,007 crore, Croma Rs 1,091 crore, Tata 1mg Rs 276 crore, and Tata CLiQ Rs 14 crore. A similar pattern is projected for 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. Blinkit leads the quick commerce market with an over 40% share. Swiggy Instamart and Zepto keep swinging between 24-27% share, while BigBasket, Flipkart and Amazon collectively hold 10% share, Meena said. Some Tata Group observers are questioning Tata Digital’s role, arguing that its services could be delivered profitably by individual group companies such as Titan, Trent, Tata AIG, and Indian Hotels. They also question why the group is burning Rs 5,000 crore in Tata Digital, which they see largely as a loyalty programme funded by these companies.Air India, however, remains the biggest drag. Its FY26 loss is expected to touch Rs 20,000 crore, far exceeding an earlier estimate of Rs 2,000 crore, with nine-month losses already at Rs 15,000 crore. By comparison, FY25 losses were Rs 11,000 crore.Holding management fully accountable for Air India’s FY26 losses would be “unfair and analytically lazy,” Kuruvilla said. Between Pakistan’s airspace closure (costing an estimated Rs 5,000 crore annually), oil above $100, and the Ahmedabad flight crash, they have been navigating a “perfect storm”. “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.”While “geopolitics excuses the financials, it does not excuse the customer experience,” Kuruvilla said. 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.Other new ventures are also under scrutiny. Tata Electronics, the unlisted semiconductor business, is projected to register a Rs 3,000 crore loss in FY26, while Tejas Networks, a listed telecom company, is expected to swing to a Rs 1,000 crore loss from a Rs 500 crore profit in FY25. Noel Tata and Tata Sons did not respond to an emailed request for comment.
