Tata Sons on Monday reported a 21.8% rise in profit after tax (PAT) for FY26, aided largely by one-time gains from the sale of investments and securities, even as losses at its long-gestation businesses such as Air India, Tata Electronics and Tata Digital continued to weigh on earnings, according to the holding company’s annual report.

PAT rose to Rs 31,961 crore in FY26 from Rs 26,231.74 crore a year earlier, despite a 10% decline in dividend income to Rs 32,528.36 crore. The increase in profit was driven by a sharp jump in other income to Rs 6,798.18 crore from Rs 124.88 crore in FY25, largely due to a Rs 6,530.64-crore gain from the sale of investments, buyback of securities and premium received on redemption of debentures.

Revenue for the Tata Group holding company rose 9.1% to Rs 42,366.55 crore during the year.

The decline in dividend income marked only the third such fall in the past decade, with all three instances coinciding with lower dividend payouts from Tata Consultancy Services (TCS), Tata Sons’ largest source of dividends. Dividend receipts from TCS fell to Rs 28,290.94 crore in FY26 from Rs 32,184.19 crore in the previous year.

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While dividends from mature businesses continued to underpin Tata Sons’ earnings, the group’s newer bets in semiconductors, digital commerce and aviation remained in investment mode.

Air India remained the group’s biggest loss-making business, reporting revenue of Rs 71,870 crore and a net loss of Rs 22,238 crore in FY26 as the airline continued its multi-year transformation. Tata Digital posted revenue of Rs 35,990 crore and a net loss of Rs 4,974 crore, while Tata Electronics reported revenue of Rs 1,31,082 crore with a net loss of Rs 1,611 crore.

In his message to shareholders, Tata Sons Chairman N Chandrasekaran said the group’s investments in aviation, semiconductors and digital businesses should be viewed as long-term institution-building efforts rather than near-term financial bets.

Highlighting the progress at Tata Electronics, Chandrasekaran said the company had, in just four years, become the fourth-largest Tata Group company by revenue and was on track to become India’s first integrated player across the electronics value chain. He said operating profits had reached breakeven and pointed to milestones including the construction of India’s first high-volume semiconductor fabrication facility at Dholera, packaging of the country’s first indigenous microprocessor and the development of capabilities across semiconductor manufacturing, advanced packaging and materials.

On Tata Digital, Chandrasekaran said the company had navigated an e-commerce market reshaped by the rapid rise of quick commerce. Despite continuing losses, the business had scaled to a gross merchandise value (GMV) of Rs 46,515 crore in four years. He said Tata Neu would now sharpen its focus on financial services, with plans to increase monthly payments users tenfold while expanding its lending and insurance offerings.

Referring to Air India, Chandrasekaran described FY26 as the airline’s most challenging year, citing airspace closures, higher fuel prices, foreign exchange volatility and the AI171 crash. He said the carrier nevertheless made progress on fleet refurbishment, customer experience and operational performance, adding that rebuilding Air India would be a long-term effort spanning fleet renewal, training, service transformation and network expansion.