Moody’s downgrades Tata Motors ratings with outlook negative

Tata Motors’ corporate family rating (CFR) and senior unsecured instruments rating, citing sustained deterioration in the company’s credit profile mainly on account of its British arm Jaguar Land Rover’s weak performances. Moody’s Investors Service also said the outlook on Tata Motors remains negative. Tata Motors Ltd’s (TML) corporate family rating (CFR) and the company’s senior unsecured instruments rating have been downgraded to Ba3 from Ba2, the ratings agency said in a statement. Both Ba3 and Ba2 ratings are considered to have speculative elements and significant credit risk. Commenting on the rationale behind the downgrade, Moody’s Vice-President and Senior Credit Officer Kaustubh Chaubal said it reflected “the sustained deterioration in TML’s credit profile, with weaker-than-anticipated credit metrics — led by the weak performance of its 100 per cent-owned subsidiary Jaguar Land Rover”. Besides, Chaubal said it was also due to Moody’s “expectation that it will take longer than we had previously expected for the company’s free cash flows to return to positive territory”. Although JLR accounted for 48 per cent of TML’s group unit sales in financial year 2018-19, it generated 75 per cent and 24 per cent, respectively, of consolidated revenue and Ebitda for TML’s automotive business, and accounted for… Read full this story

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