Building an empire: How Tata Group are taking on the world

Men from Mumbai set sights on IBM

Tata Consultancy Services has been announced as the world's second most valuable information technology provider. The company is now the world's second most valuable information technology company after IBM.

The company's $58.66 billion market capitalisation places it narrowly ahead of both Accenture and Hewlett-Packard. IBM remains way ahead of the competition at $200 billion, but Tata Consultancy Services is closing the gap. According to global equity firms JP Morgan and CLSA, Tata Consultancy Services is also all set to become India's first company to hit a market cap benchmark of $100 billion within a few years.

Its current market capitalisation already places TCS on a path towards rapid growth. “This is taking place at industry-leading margins,” a spokesman for CLSA has said, “and everything seems to be going right for TCS at the moment. We believe it has the potential to be India's first company to reach $100 billion in market cap.”

JP Morgan agree. “If TCS grows revenues at a CAGR of 15% over four to five years, holding margins and its ROE keeps constant at current multiples,” a source claimed, “we can say that the $100 billion market cap threshold is not only realistic, but easily achievable.”

A cyclical downturn that has impacted the global IT industry since 2011 has been keeping TCS in check, but there are signs of a new, upward trend. CLSA are confident that the company's stock remains the best medium to long-term IT services play. The Tata Group's flagship company was first listed ten years ago and overtook what had previously been India's most valuable company, Reliance Industries Limited at the end of 2011.

Over a dozen foreign brokerage firms, including CLSA, JPMorgan, Barclays, Jefferies Macquarie and HSBC have maintained or upgraded their ratings on TCS. This is clearly a company to watch for the future and big things are expected of these unassuming men from Mumbai.

Aluminium bodies meet business minds

Jaguar Land Rover has announced a major investment boost of £1.5 billion. The company, owned by Tata Motors, will use the money to develop advanced aluminium vehicle architecture in a new range of sports cars.

TATA have built a strong reputation by marrying Indian excellence in management to British industry and believe they will create as many as 1700 new jobs at its advanced manufacturing facility in Solihull in the West Midlands. The latest additions will bring the total number of UK manufacturing jobs announced by Jaguar Land Rover over the last three years to almost 11,000. In addition, the new vehicles will feature the first engine to be built at the new £500 million engine manufacturing centre near Wolverhampton.

“We are a business driven by design, technology and innovation,” the JLR chief executive officer Ralf Speth told the Frankfurt Motor Show. “This investment and job creation is further evidence of our commitment to advancing the capability of the UK automotive sector and its supply chain.”

As part of a series of announcements at the automotive show designed to foreground Jaguar Land Rover's focus on design excellence, Dr Speth revealed that the first new model to utilise the innovative new architecture will be a mid-sized sports sedan. The new model, to be launched in 2015, is being billed as one of the most efficient and advanced sports sedans in the world.

Jaguar also revealed its first-ever sports crossover concept vehicle, the C-X17, created as a design study to introduce the aluminium monocoque architecture. The inherent flexibility of the latest technology will enable the Jaguar Land Rover business to compete in exciting new segments and form the basis for a future range of Jaguars.

The UK business secretary Vince Cable was quick to lend his support. “Jaguar Land Rover has been experiencing great success over the last couple of years,” he said, “and this ground-breaking project takes them onto the next level. These projects typify the type of innovative and high value R&D that the UK excels in. The government is supporting them through its automotive industrial strategy.”

Sales figures for August were singularly healthy. They registered a 28% overall jump globally, compared to the previous year. While Land Rover sold 22,447, which was a hike of 18%, Jaguar sold 5,405 vehicles, representing an increase of over 90%. Sales increased 43% in China, suggesting that the Far East is set to become a more important market than ever. As these exports increase and investment continues to flow into the business, both India and the UK can expect great things from Tata and Jaguar Land Rover.

The smell of future success

Jaguar Land Rover has announced plans to develop a £10million research programme. The company, wholly owned by Tata Motors, expects to use it to gain a lead in virtual simulation technology.

The five year project will be undertaken in collaboration with four UK universities and the Engineering and Physical Sciences Research Council. It is expected to lead to the development of advanced new simulation tools and processes, which will improve the capabilities and qualities of virtual simulations. Even smells and sounds will be used to make results more realistic.

Using more advanced simulations will allow the iconic British luxury car brand to design, develop and test complex vehicle components and assemblies more rapidly.

“The unique £10 million, five year collaboration between Jaguar Land Rover and the UK's leading academics will develop the capability of the virtual simulation industry in the UK,” a Jaguar Land Rover statement has said. “It will give manufacturers access to new, world-class simulation tools and processes.”

Jaguar jobs come to UK

Car giant Jaguar Land Rover are considering a major expansion plan at their UK factory which could create as many as 1,000 jobs.

The company, owned by Tata Motors, have singled out their Halewood factory in Merseyside, north-west England, for the latest investment injection as a result of rising demand for its Range Rover Evoque line. The factory will also be involved in the rollout of new models.

Jaguar plans to launch 40 new models in the next five years and aims to double car sales to 750,000 by 2015. According to reports, it is believed the company is also eyeing plans to expand its Solihull factory in the West Midlands to manage the new Jaguar launches.

The Indian car maker already employs 24,000 workers in the UK and is one of the country's biggest exporters. In May, it revealed record annual pre-tax profits of £1.7 billion, and has reported a 29% rise in first-quarter profits this year to £304 million.

Tata Steel UK has secured a five year agreement to provide aeronautical company Safran with aircraft quality steel. The steel will be delivered direct to Safran Group companies and its subcontractors and the deal is estimated to be worth in excess of £9 million a year.

A £22million project will see a new manufacturing plant coming to the UK to look at mega low-carbon UK technology. The plant, built by Tata Steel, will create up to 150 jobs and act as a bridge between green technology prototypes and high-volume production.

After a six month upgrade, a blast furnace in the UK is ready to come back online. The furnace is at Port Talbot steelworks in Wales and is estimated to have cost parent company Tata Steel nearly £185 million. This has been seen as the most significant investment in the UK's largest steelworks.

Steeling Europe for new investment

Europe's steel industry has been beset by problems and continues to battle on through sluggish demand. These concerns do not seem to affect Indian steel giant Tata Steel, which recently announced news of an estimated £50 million upgrade to one of its UK facilities.

The investment will be made to the Queen Anne blast furnace at the Tata Steel works in Scunthorpe, and will be the latest makeover in the lead up to its 60th anniversary in April 2014.

It will reline the furnace, which involves replacing the brick and refractory lining, replace the copper mantle plates and copper stack cooling plates. It will also involve making improvements to the water distribution system and repairs to the gas cleaning system. In layman's terms, it means that the furnace will have greater capacity and operate more efficiently.

The investment appears to represent an overall plan to revive the company's European operations. A large part of the investment is aimed at the 2,000 acre site at Scunthorpe, although some of it has also been used to improve one of the blast furnaces at Port Talbot in Wales. Tata remain Europe's second largest steel producer, but with another Indian-backed company, ArcelorMittal, as the biggest, the UK-India relationship is clearly one set in steel.