"Tata is already a USD 100 billion group. To get to the next level we need scale. We can't do it with multiple small companies. We need top companies. I am not saying specifically that all companies need to be No. 1 or 2 [in their sectors], but we need to have top companies," Chandrasekaran said in an interview to Fortune magazine.
"We won't exit a business just to get a headline. But we will exit if we aren't getting returns today and we don't think we'll get them tomorrow. I have thought a lot about this. We'll definitely prune the portfolio," the former Tata Consultancy Services (TCS) chief said.
The report said Chandrasekaran's colleagues and investors hope he can transfer to the rest of the Tata group some of the "digital magic" he brought to TCS, where he tripled sales and profits during his seven years as CEO.
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"You can't perform if you're not fit. If you want to run a six-minute mile, you have to bring your weight down."
The report said much of the House of Tata is in "urgent need" of renovation, with some of its biggest businesses growing sluggish and vulnerable to smaller, nimbler rivals.
"Chandra has vowed to reorganize the group to focus on growth and scale. Tata's corporate roster is rife with opportunities for consolidation, with multiple companies competing in the same segment. Even veteran Tata executives are hard-pressed to explain why Tata Finance, Tata Housing Finance, and Tata Capital Finance operate as separate companies," the magazine said.
The report said Chandrasekaran isn't pushing significant changes to the reporting relationship with the trusts.
"I am not briefing [them] on what we're doing with every single company. But they are the primary shareholder for the group. I don't think there is a conflict in keeping them informed," he said.
On the group's Nano car, Chandrasekaran stresses that Tata Motors will have other priorities.
"Passenger car sales are small, and within that the Nano is even smaller. I don't think shutting down the Nano plant is a decision the team will make.
On prospects for Tata Sons' relationship with the Mistry family, Chandrasekaran said he cannot talk about the issue given that the matter is in the courts.
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