One huge conglomerate with its operations spread far and wide in almost every
field, and this one is a pioneer, right there at the top. It is only natural
then that the Tata Group has grabbed any opportunity thrown up by new technology
developments. As chairman Ratan Tata says, "The group is constantly
changing. It is pursuing new opportunities created by developments in
technology. At the same time, we continue to retain our strengths in the core
business sectors that form our foundation."
The Tata Group, with 80 companies in seven sectors–engineering, materials,
energy, chemicals, consumer products, communication and information systems and
services–has two promoter companies, Tata Sons and Tata Industries. The IT
companies in the stable are Tata Consultancy Services, still a division of Tata
Sons, Tata Infotech, Tata Liebert and Tata Elxsi. Together, they accounted for
Rs 4,032 crore in 2000-01–that’s 10% of the entire group’s revenues of Rs
40,000 crore. IT flagship TCS alone brought in Rs 3,142 crore.
An enviable quartet
The Tatas grew TCS into Asia’s largest software exporter after creating it
as a logical alternative to the lapsed management agency system in the sixties.
A year ago, succeeding in the new economy might have posed a dilemma for TCS,
among nimble faster growing companies like Infosys, Wipro and Satyam.
The rate at which TCS grew, there were those that claimed that others would
overtake it in revenues in a few years–the fear was that sheer base size would
make high growth figures difficult in a fast-moving economy. But numbers posted
in 2000-2001 and other developments scoff at all negativity–a growth of 54.5%
in 2000-01, up from 23% in 1999-00; revenues shoot up from Rs 2,034 crore to Rs
3,142 crore; over 800 clients, seven of them in the Fortune 10 list in 2000;
4,000 new recruitments during the year, bucking the layoff trend afflicting most
of the industry; and finally, a new Asia-Pacific hub set up in Singapore. That’s
TCS for you.
The next in line as far as group IT entities go is Tata Infotech, another
steady performer that offers a broad portfolio of services through third-party
alliances and technologies. It is involved in software consulting, hardware
manufacturing, offshore software development, systems integration, distribution
of international software products and education services. The company seems to
have one aim–consolidation, broadening its systems integration portfolio,
spreading its wings abroad with partnerships with local developers. Tata
Infotech doubled its growth from 11% in 1999-00 to 21% this fiscal, revenues
were at Rs 524 crore this year, up from Rs 432 crore.
Power supply systems major Tata Liebert has its own potion for success in the
future–identifying emerging markets while constantly designing new products
and stabilizing existing business. Growth here has gone up from 28% last year to
47% this year; revenues from Rs 127% crore to Rs 188 crore. The year saw a Rs
26-crore turnkey power solution project from Power Grid Corp, the single-largest
order even for 50:50 partner Liebert Corp.
And finally, Bangalore-based Tata Elxsi–the technical computing arm which
is primarily engaged in advanced technologies like CAD/CAM, film and video,
scientific computing and commercial and networking markets. While the film and
video segments showed the highest growth, the CAD/CAM order book has also shown
healthy trends. During the period, the company completed one of the largest
campus networks in the country for Bharat Heavy Electricals, Hardwar. Revenues
jumped from Rs 146 crore in 1999-2000 to Rs 179 crore in the fiscal under
review.
Tomorrow’s roadmap
Where are the future growth areas? Tata Power is laying fiber-optic cables,
the first step towards faster broadband services. Tata Power’s plans of
identifying and entering new islands of opportunity have seen initiatives like
Mumbai Broadband, Metro Broadband and National Highway projects, where it will
lay optical fiber cables. Tata Industries, Tata Steel and Tata Power have posted
bids for acquisition of the government’s stake in Videsh Sanchar Nigam, the
country’s biggest Internet service provider.
With Tata Industries playing the lead role of a catalyst for the introduction
of new businesses within the group in high-technology areas, it seems likely
that the new business opportunities being pursued might end up as pioneering
acts again, some time in the future. And though the group has been slow to take
off in some of its ventures, like broadband services and the Internet access
business, it still has enough experie nce and muscle to continue leading
from the front.