The Tata Group, one of India's most storied conglomerates, faced a challenging year marked by a significant erosion in its overall market capitalisation. Data reveals a sharp decline across most of its listed entities, with its crown jewel businesses acting as the primary drag on investor wealth.
Heavyweights Drag Down Conglomerate's Value
According to data from Capitaline, 18 out of the 24 listed Tata group companies witnessed a decline in their market value over the past year, with some falling as much as 60%. The collective wealth erosion was substantial, painting a difficult picture for the diversified group.
The biggest contributor to this decline was the information technology bellwether, Tata Consultancy Services (TCS). TCS alone wiped off a staggering ₹320,038 crore from the group's market cap. Its valuation fell to ₹11,63,107 crore on January 5 from ₹14,83,145 crore a year earlier, as the stock price slumped by 22%. This downturn was attributed to a slowdown in discretionary spending by its global clients, steep tariffs imposed by the US, and an increase in H-1B visa fees. A recent HSBC report, cited in the Financial Express, noted that the IT sector may no longer be a long-term double-digit growth story.
Automobile and Retail Sectors Follow Suit
Following the demerger of its commercial vehicle arm, Tata Motors Passenger Vehicles (PV) emerged as another major laggard. Its shares plunged 53%, erasing ₹153,421 crore from its market capitalisation. The company grappled with production losses at its Jaguar Land Rover (JLR) unit due to a cyberattack, tariff-related expenses, unfavourable foreign exchange rates, and higher warranty costs. Management warnings about persistent geopolitical tensions and supply chain risks led JM Financial to assign a 'Reduce' rating to the stock in November.
In the retail space, Trent, a constituent of the Nifty 50 index, delivered a disappointing performance. Trent's market cap declined by ₹102,279 crore, settling at ₹157,461 crore after its stock price fell 39%. The slowdown was exacerbated by a weak Q3 business update in January, which showed sales growth slowing to below 20% from the 40-50% range seen a year ago, disappointing investors and highlighting concerns over high valuations.
Other Notable Losers and Surprise Gainers
The pain was widespread. Tejas Networks was the worst-performing stock in the group, crashing 62% and wiping out ₹13,038 crore in wealth. Other significant contributors to the group's market cap erosion included Indian Hotels, Voltas, Tata Tech, Tata Elxsi, Tata Chemicals, Tata Teleservices, and Tata Power, each losing between ₹5,000 crore and ₹11,000 crore.
However, it wasn't all bleak for the Tata portfolio. Tata Steel emerged as the best-performing group company, jumping 34% and adding ₹59,177 crore to its market cap, buoyed by a strong year for metal stocks. Titan Company, partly owned by the late investor Rakesh Jhunjhunwala, also shined. Boosted by rallying gold prices and robust jewellery demand, Titan's stock rose 18%, adding ₹55,926 crore to investor wealth. The company's shares hit a 52-week high following a robust Q3 update. Tata Consumer, Tata Communications, and Tata Investment were other companies that provided some support to the group's overall valuation.
The divergent performances within the group underscore the varied challenges and opportunities across different sectors of the Indian economy, from technology and automotive to retail and commodities.
