Tata Group Chairman Ratan Tata has asked all group companies to do a reality check in view of the economic slowdown, expected to continue in the New Year.
At the same time, Tata has cautioned managements of individual companies against taking an extremely risk-averse approach and letting go the business opportunities the slowdown may offer.
In his annual message to employees today, Tata said group companies would need to "review and moderate" their earlier future projections, and expansion schemes would need to be in sync with the current realties.
"However, we must not be so risk-averse that we lose out on the interesting opportunities that may present themselves in various geographies," he added.
Tata said to combat the pressures of higher input costs, each company would need to rigorously pursue a reduction in manufacturing and process costs of products with a view to building back margins.
He said while India had been fortunate to see continued economic growth and consumer demand, it had also seen an unprecedented rise in inflation, political conflicts, and policy uncertainties, all of which led to overall growth taking a hit.
The message quoted Tata as saying he believed the US would see a slow recovery and that in western Europe and the UK would probably be slower.
On the opportunities ahead, Tata said India could see a dramatic recovery if inflation remained in check and if the availability of credit and enhanced money supply was reinfused into the system.
"Asia and certain countries in Africa will present interesting opportunities for us. Let us seize this to make 2012 a year of great achievement instead of a year of great adversity," the message said.
In his address, he also gave his successor Cyrus Mistry a vote of confidence, saying, "I believe Cyrus embodies the attributes required to lead the group in the years ahead."
Tata also referred to the 2G scam and said the group had come out unscathed. "I'm pleased that in the 2G scam, the investigative agencies have stated they have found no evidence of the group's involvement in the wrongdoings or conspiratorial action under investigation. The bona fides, ethics and values of the Tata Group have remained intact," he said.
During the year, the Tata Group's revenue grew to $83 billion-plus, driven by robust domestic demand in the first half and bolstered by the growth of global IT services by TCS as also the welcome increase in sales of Jaguar and Land Rover vehicles.
The drop in demand for steel in western Europe continued to be a depressing factor for the performance of Tata Steel Europe.
