Harish Manwani Urges Strategic Clarity at Tata International
Tata International Ltd (TIL), the trading and distribution arm of the Tata Group, has come under close scrutiny after Harish Manwani, an independent director at Tata Sons, called for a sharper business focus and a clear path to profitability. At a recent board meeting of Tata Trusts, chaired by Noel Tata, Manwani stressed the urgent need to define the company’s strategic purpose, moving it away from being a loosely structured entity reliant on transactional opportunities.
A Call for Focused Strategy
Manwani, a veteran of global fast-moving consumer goods giant Unilever, voiced his concerns directly to Noel Tata during the meeting attended by Tata Sons chairman N. Chandrasekaran and other board members. He urged the leadership to ensure Tata International develops a robust long-term strategy that can deliver recurring profits, instead of being spread thin across multiple trading activities. His intervention reflects growing pressure on Tata International to establish a clearer role within the Tata Group ecosystem.
Financial Pressures Mounting
The call for sharper focus comes at a time when Tata International is grappling with back-to-back losses. The company ended FY25 with revenue of ₹31,868 crore but posted a steep loss of ₹477 crore. The previous year, it reported a ₹213 crore loss, following a modest profit of ₹100.23 crore in FY23. While turnover has doubled since 2020, profitability and net worth remain serious concerns.
Trading remains the backbone of Tata International, accounting for 84% of its revenue, largely driven by commodities like iron ore, coal, and agricultural products such as oilseeds and pulses. However, this segment is inherently low-margin, and factors like forex losses, restructuring, and setbacks such as the cancellation of an exploration licence in Madagascar have worsened the financial strain.
Funding Requirements and Investments
Noel Tata acknowledged the scale of the challenge, noting that the company requires about ₹3,000 crore in fresh capital but is currently seeking only ₹1,000 crore. Tata Sons has already invested about ₹780 crore, raising its stake to nearly 67%, and last September, it approved an infusion of ₹1,000 crore with additional commitments to support the company’s turnaround.
To strengthen Tata International’s position, Noel Tata has also outlined plans to bring in external partners. Among these are proposed joint ventures worth $100 million with Mitsubishi Corp. and Mercuria, signaling an effort to align the company more closely with global partners and new growth avenues.
Governance and Overlaps Within the Group
Tata International’s governance structure includes a seven-member board chaired by Noel Tata, alongside senior leaders such as Tata Steel CEO T.V. Narendran and Tata Chemicals CEO R. Mukundan. However, the company’s mandate has often overlapped with other Tata Group firms, such as Tata Steel and Tata Chemicals, which handle their own export businesses. This overlap has created questions about TIL’s unique value proposition within the larger conglomerate.
Global Footprint
Despite its financial struggles, Tata International has a strong global footprint. In FY25, India contributed 37% of the business, Asia 48%, Africa 7%, and the rest of the world 8%. Its operations span trading, distribution, and manufacturing, though the latter two account for just 16% of total revenue.
The Road Ahead
The debate sparked by Harish Manwani highlights a critical crossroads for Tata International. The company has scale and global reach, but profitability has remained elusive. For TIL to justify continued capital infusion from Tata Sons and attract external investors, it must sharpen its strategic focus, strengthen its margins, and clearly define its role within the Tata Group.
As the Tata Group navigates an increasingly competitive global landscape, Tata International’s ability to transform itself from a broad-based trading entity into a focused, profitable business will be key to its survival and relevance.
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Disclaimer
This article should not be interpreted as investment advice. For any investment decisions, consult a reputable financial advisor. The author and publisher are not responsible for any losses incurred by investors or traders based on the information provided.