Tata Group chairman Cyrus Mistry on Tuesday said the conglomerate is open to grow in India and internationally through organic route as well as acquisitions. The recent pressure in some of Tata group’s businesses in Europe has not slowed down its ambition of expanding globally.
“… no one should ignore the fact that the Tata group’s international revenues are close to 70 per cent of our composite turnover. The majority of the group’s capital expenditure in the last three years has been in international geographies,” he said.
“At the recent AGLC (Annual Group Leadership Conference), I had mentioned that two new markets, Iran and Myanmar, have opened up to us and several of our companies are gaining traction there. We continue to remain open to growth opportunities in India and overseas, through the organic route and through acquisitions,” he said in an interview to the company’s in-house magazine. Mistry appreciated his predecessor Ratan Tata’s vision to take the group global in the early 2000s, which has left the company a very strong platform. “I think the onus is now on us to build on that, and to make sure that we not only have a global footprint, but that we create global mindsets,” he said.
He also spoke about coming to grips with responsibility of chairmanship, multiple challenges facing Tata companies, essentials of technology, innovation and customer centricity, and continuing the group’s commitment to societal causes. Each of the group companies is charting its own strategy and growth story, with a focus on sustainable and profitable growth, Mistry asserted. The group invested Rs 4,15,000 crore ($79 billion) in capex over the last decade. Of this, Rs 1,70,000 crore ($28 billion) was invested in the last three years alone.
“We recognise that growth has to be a function of the operating cash flows we generate. At the group level, over the last three years, our operating cash flows have grown by over 30 per cent CAGR. But this, as we know, is not the appropriate way to use such data – our individual companies need to earn the right to grow,” Mistry said.
“At the group level, we are focused on helping our companies earn this right by building strong operational cash flows and looking at their capital structures.” But he struck a note of caution: Capex should not be looked in isolation from investment in talent, brands and technology. He feels these will be the true differentiators in future. “We are building the Tata group of the next 150 years,” he said.
Highlighting the need for organisational speed and agility and an openness to change, he said organisational agility is crucially important in the context of turbulent environment. Mistry called for caution so as to have right composition of teams that can collaborate and break through hierarchical processes when needed.
Recognising the digital wave, the Tatas are incubating three companies. Tata CLiQ, the e-commerce platform, is an omni-channel marketplace with curated products. Tata iQ, the big data play, uses data analytics and Tata Digital Health is building the de facto
platform for healthcare in India. “We will continue to invest in our strong business-to-business enterprises where we have powerful drivers for long-term value creation,” Mistry added.