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N. Chandrasekaran’s decision to step down as chairman of Tata Sons has come at the worst possible time for India’s largest conglomerate. As per a statement, he will remain until the end of his term in February 2027, but the message is unmistakable: Tata Group is entering a leadership transition just as some of its biggest businesses are facing mounting financial and strategic challenges.

The timing matters because Tata Sons is not merely searching for a successor. It is grappling with a deeper problem.

Air India and Tata Digital, two of the group’s most ambitious bets, are consuming capital at a pace that is becoming difficult to ignore. At the same time, the conglomerate remains heavily dependent on Tata Consultancy Services (TCS) for cash generation. For years, that dependence was manageable. Today, it is beginning to look like a strategic vulnerability.

The 158-year old Tata Group has always thrived on long-term thinking. It built steel plants before India industrialised, software businesses before the world outsourced technology and luxury hotels before India became a major travel destination. But long-term thinking works only when somebody is paying the bills.

For decades, that somebody has been TCS.

India’s largest software exporter has become far more than the Tata Group’s most valuable company. It has become the financial engine that powers the entire conglomerate. The dividends generated by TCS have helped Tata Sons reduce debt, support investments, fund expansion and sustain the charitable activities of the Tata Trusts.

Few conglomerates in the world enjoy such a dependable source of cash.

Also read: Amid Differences With Noel Tata, N. Chandrasekaran Steps Down as Tata Sons Chairman

The problem is that the list of businesses consuming that cash continues to grow.

Air India has emerged as the biggest challenge. The airline’s losses have ballooned even as Tata Sons continues to invest heavily in fleet expansion, systems integration and operational restructuring.

The acquisition of Air India was celebrated as the return of a national icon to its original home. The romance of that narrative, however, cannot obscure the........

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