How Tata transformed under Ratan

From a disjointed mammoth, the group turned into a cohesive colossus

- KRISHNA KANT

When Ratan Tata took over the reins of the Tata Group from JRD Tata in 1991, the conglomerate was an India-focused enterprise with a presence across nearly every sector of the economy: from steel and automotive to chemicals, cement, power, paints, soaps, cosmetics, tea and coffee, pesticides, pharmaceuticals, software, electronic hardware, consumer durables, printing, publishing, hospitality.....

Ratan Tata had inherited a profitable and financially robust enterprise, yet the group lacked cohesion and a unified long-term vision.

At the time, the 34 listed companies in the group had reported combined net sales of ₹8,992.8 crore in 1990-91 (FY91), with a net profit margin of 5.83 per cent. The group's combined market capitalisation stood at ₹8,688.6 crore, and total assets were ₹10,871 crore at the end of March 1991. This translated into a respectable return on equity of 16.1 per cent and a debt-to-equity ratio of 1.16x.

Tata Motors was the group's largest company by revenue, generating Rs 2,072 crore in FY91, followed closely by Tata Steel at ₹1,991.5 crore. However, Tata Steel led in net profit with ₹160.1 crore, followed by Tata Motors at ₹142.1 crore. Tata Steel also had the highest market cap of ₹3,653.5 crore, while Tata Motors came in second at ₹1,788.3 crore as of March 1991.