Moody's affirms Tata Motors corporate family rating of Ba1, outlook unch
This story was originally published at 18:37 IST on 13 June 2025
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--Moody's affirms Tata Motors' Ba1 corporate family rating, outlook positive
--Moody's: Tata Motors' rating reflects strengthened consol credit profile
NEW DELHI – Moody's Ratings Friday affirmed Tata Motors Ltd.'s "Ba1" corporate family rating and also kept the outlook unchanged at "positive". Moody's did not upgrade the company's rating despite affirming it on grounds of "sustained strengthening" in its "consolidated credit profile driven by gross debt reduction and earnings expansion, which are accelerating deleveraging even as the global automotive industry faces challenging conditions".
Moody's said an upgrade in the company's rating to investment grade would require sustained strong operating performance, meeting targets such as below-zero net debt, high single-digit earnings before interest and tax margin, positive free cash flow, and "very good liquidity". The agency upgraded the corporate family rating of Tata Motors' wholly-owned subsidiary, Jaguar Land Rover Automotive Plc, to "Ba1" from "Ba2".
The rating outlook for JLR remained positive, the agency said. It added that due to the "upcoming demerger" of the commercial vehicles business of Tata Motors, JLR would become "an even more integral part of TML's (Tata Motors Ltd.'s) operations and therefore the expected support for TML from its parent Tata Sons would also be extended to JLR."
On the rating action on Tata Motors, Moody's said any deviation in the company's financial policies that result in consolidated debt to earnings before interest, tax, depreciation, and amortisation sustaining above 3.5 times would exert negative rating pressure. Cash flows turning negative or a weakening of liquidity would also exert negative rating pressure, it said.
According to the rating agency, the payment obligations of Tata Motors in the next one year and few months amount to $5.9 billion, which includes $2.3 billion in debt repayment, $3.1 billion in capital expenditure, and $500 million in dividends. Moody's believes the cash position of the company and JLR and the forecasted operating cash flows of $3.6 billion "through September 2026 will comfortably cover" these obligations. End
Reported by Rajesh Gajra
Edited by Rajeev Pai
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