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Tata Group's revenue from defence and aerospace to rise 7.5% in FY16

Group executives say the government has expedited the pace at which requests for defence procurement are being floated

Published: Mar 16, 2016 05:06:56 PM IST
Updated: Mar 16, 2016 05:25:03 PM IST
Tata Group's revenue from defence and aerospace to rise 7.5% in FY16
Image: Mexy Xavier
Bombay House serves as the head office of the Tata Group

The defence and aerospace business of the Tata Group is expected to clock revenues of Rs 2,650 crore in the current fiscal, a year-on-year growth of 7.5 percent, according to Mukund Rajan, member of the group executive council at Tata Sons and brand custodian.

The growth in turnover from this business, identified by chairman Cyrus Mistry as one of the clusters that will power future growth at the salt-to-software conglomerate, was lower than the compounded annual growth rate of 18 percent witnessed by it over the last five years.

Various Tata group companies including unlisted ones like Tata Advanced Systems Ltd and divisions of listed entities like Tata Motors and the strategic engineering division of Tata Power are engaged in supplying equipment, services and engineering solutions to India’s armed forces, often collaborating with each other while doing so.

The aerospace and defence sector is a priority area for the Narendra Modi-led National Democratic Alliance government and is a key component of the Make in India campaign, the prime minister’s ambitious pet project.

Tata Group executives, in charge of aerospace and defence, stated that there has been an acceleration in the pace at which the government floats requests for proposals (RFPs) for defence procurement.

Vernon Noronha, vice president of defence and government business at Tata Motors, stated that not only were RFPs being floated but follow up action in terms of field trials of arms and combat vehicles were also being expedited. “This is a good sign and we are seeing this kind of pace after a long time,” said Noronha.

Noronha added that Tata Motors is expected to sign a deal with the ministry of defence, before the current fiscal closes, to supply 619 high mobility 6X6 trucks. The company had earlier supplied 1,239 similar vehicles to India’s armed forces.

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