Tatas expect 40% rise in revenue from defence sector

Exports seen growing with Tata Motors winning Rs 220-crore project funded by the UN

The Tata Group expects revenue from the defence sector to grow 40 per cent this financial year, boosted by new orders, senior officials said.

The Group’s revenue from the sector, known for its minuscule participation by Indian private companies, is expected to rise to Rs 2,400 crore in FY14, said Tata Sons’ group executive council member Mukund Rajan here on Wednesday. In FY13, group firms earned revenue of Rs 1,700 crore from the defence sector.

Rajan said 14 companies of the group were engaged in defence-related businesses. “It is a booming business. We have an order book size of Rs 8,000 crore. Many of these would be completed between the next one year to four years,” he added.

Tata Motors, Tata Power (Strategic Electronics Division) and Tata Advanced Systems (TASL) are three major entities within the group in the sector, accounting for the bulk of the revenue.

EXPECTING A BOOST

• In FY13, group firms earned revenue of Rs 1,700 crore from the defence sector
• TASL, fully owned by Tata Sons, holds all the major defence licences and is a participant in all the major development and buy & make programmes of the ministry of defence
• Tata Motors has supplied about 100,000 vehicles to the defence forces and is now focusing on modernisation and system upgrades of mobility

TASL, fully owned by Tata Sons, holds all the major defence licences and is a participant in all the major development and buy & make programmes of the ministry of defence. Group officials said TASL had invested a little over Rs 400 crore in the past five years and had set up production facilities spread over 450,000 sq ft across India. TASL has created a design and development centre for indigenising missile sub-systems and mini-unmanned aerial vehicles.

Group companies are also looking to expand exports. Tata Motors recently won a military contract worth Rs 220 crore, from the UN stablisation mission for Mali, Africa, against international competition, said V S Noronha, vice-president-defence and government business.

He said they’d be supplying a little over 500 vehicles in the next six months. The company also exports to other African and Asian countries.

Tata Motors has supplied about 100,000 vehicles to the Indian forces and is now focusing on modernisation and system upgrades of mobility platforms, while moving from being a logistics support provider to a combat vehicle player, group officials said. It recently developed a WHAP (Wheeled Armoured Amphibious Platform) and LAMV (Light Armoured Multipurpose Vehicle). Tata Advanced Materials, Nelco, TCS, CMC, Tata Elxsi, TAL manufacturing solutions, Tata technologies, Titan Companies, Avana Integrated Systems, Nova Integrated Systems , and Tata Industrial Services are the other group firms engaged in defence projects.

“A unique strength of the Tata group companies is that they can provide convergent defence solutions and thus meet multiple requirements of customers,” Rajan said.