Mistry takes over at Bombay House

BUS

A look at the challenges that Mistry has on hand across the flagship companies of the Group:

Tata Steel

The challenge begins with Tata Steel's debt amounting to Rs 53,431 crore as on September 2012, which has stayed at those levels since it acquired Corus. Analysts tracking the company say that European operations continue to be a major problem for the company and with slowdown in the demand in Europe and a falling export demand because of downturn in Asia (especially China), the company's troubles are only growing. On the domestic front too, slowdown in infrastructure, construction and automobile industry are hurting.

Tata Motors

Its dominance in the commercial vehicle space may have gone unchallenged for years now (around 60 per cent of the market) but there is a serious challenger that has entered the market this year in Daimler, which has invested Rs 4,500 crore in its plant in Chennai and launched its Bharat Benz trucks this year. Even Ratan

Tata has acknowledged the competition and mentioned in the annual report that the company is developing competitive and fuel-efficient vehicles. There is also competition from Volvo and Mahindra. While JLR has done well over the last year even in a challenging global environment and has contributed significantly to the company's revenues and profits, experts feel that the company needs to evolve further.

Tata Power

While the entire industry is affected, this is something that Mistry will have to deal carefully and strategically in a way to secure fuel supply for the company's power projects and thus their future. While coal block allocation has been a cause of concern, imported coal prices which are significantly higher than the domestic coal is making a lot of projects unviable. In 2011-12, the company provided Rs 1,800 crore for impairment in its Mundra Mega Power plant, which led to an overall loss of Rs 968 crore in the year for the company. While it has approached CERC to address the issue of imported coal prices, Mistry will have to deal with the challenge of securing fuel at viable costs for the company's power projects.

... contd.

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