Tata Group stocks were ended mixed after TCS CEO N Chandrasekaran was named the new Chairman of Tata Sons yesterday, roughly three months after the former Chairman Cyrus Mistry was ousted. He will take charge from February 21.
"By selecting Chandrasekaran as the Chairman of Tata Sons, the selection committee has sent an unambiguous signal to all the stakeholders that they have chosen a person who has successfully managed a global enterprise straddling various geographies and is also firmly rooted in the socially-conscious Tata ethos. His global perspective will help steer the technology-to-tea conglomerate in these challenging times," said Ajay Bodke, CEO & Chief Portfolio Manager, PMS, Prabhudas Lilladher in a note.
TCS settled 3.9% lower to Rs 2252 and was the biggest laggard on Sensex, even after reporting 11.2% y-o-y growth in Q3 profit to Rs 6,778 crore from Rs 6,125 crore reported in December 2015 quarter.
Tata Motors (0.71%), Tata Steel (0.3%), Tata Elxsi (0.32%) and Tata Power (0.06) also fell after the announcement.
While, gainers included, Tata Coffee (gained 5.8%), Tata Global Beverages (up 2.44%), Tata Metaliks (up 1.03%), Tata Investment Corporation (up 0.35%) and Tata Sponge Iron (0.49%).
As the new chairman, Chandrasekaran is looking to soothe investors after a bruising public spat over the ouster of his predecessor.
“At the Tata group, we are at an inflection point. I am aware that this role comes with huge responsibilities. It will be my endeavour to help progress the group with the ethos, ethics and values that the Tata group has been built on,” said Chandrasekaran on the development.
On Chandrasekaran’s watch, TCS revenue jumped more than threefold to Rs 1.09 lakh crore in FY16. Profits also went up over three times to Rs 24,375 crore.
TCS now accounts for 56% of the Tata group’s combined market capitalisation of $116 billion, besides contributing 73.7% to group holding company Tata Sons’ revenue, which comes from dividends of its listed entities. He has also made TCS the biggest cash generator for Tata Sons — contributing almost 90% to the Tata Sons coffers in 2014-15.
Rajesh Gopinathan, who has been the CFP for the last 3 years, has been chosen to replace Chandrasekaran as the new chief executive officer and N Ganapathy Subramanian, head of financial services as the chief operating officer of the company.