Signs of a turnaround at its marquee Jaguar Land Rover unit may not be enough to ease the challenges facing India’s oldest and most-storied business empire.
The Tata Group bought the British luxury carmaker in 2008 for $2.3 billion, and it’s lately become a drag on the salt-to-software conglomerate, racking up losses in three quarters through December. Although Jaguar posted a net income of 119 million pounds ($151 million) this week, debt at owner Tata Motors Ltd has grown to almost $14 billion, as it struggles to tide over a demand slump in China, the world’s biggest auto market.
JLR’s mixed fortunes have hit Tata — whose wider group debt load bloated to at least $36 billion, the largest among India’s conglomerates — just as it seeks to revamp the sprawling business. Making matters worse, a steel deal in Europe that would’ve eased the group’s liabilities unraveled this month.