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Informist, Monday, Sept. 29, 2025

 

AHMEDABAD - Moody's Ratings has affirmed Ba1 corporate family rating for Tata Motors Ltd. but has changed its outlook to negative from positive, the ratings agency said in a press release Monday.

 

The affirmation of Ba1 rating for Tata Motors reflects the rating agency's view that it may be able to withstand the impact of the cyber incident that has severely disrupted its operations over the last four weeks and those of its wholly owned subsidiary Jaguar Land Rover Automotive Plc's.

 

Jaguar Land Rover, the UK-based subsidiary of Tata Motors Ltd. and Britain's biggest carmaker was struck by a cyberattack in early September, following which its factories remained shut across the majority of regions. Owned by the Tata group since 2008, the luxury carmaker has three factories in the UK, which together manufacture around 1,000 cars per day. So severe was the impact of the cyberattack that the UK government said it would underwrite a 1.5-billion-pound sterling loan guarantee to the company after its operations were shut down for nearly a month. According to media reports, Jaguar Land Rover has not been able to manufacture cars at any of its factories across the UK, Slovakia, Brazil, and India.

 

The change in outlook to negative from positive reflects the rating agency's view that a full recovery in credit metrics will likely take several months, the release stated. "We estimate that JLR's production halt will reduce Tata Motors' consolidated earnings before interest, taxation, depreciation and amortisation to around $850 million for the financial year ending Mar. 31, 2026, down from our previous forecast of around $3 billion. Additionally, higher working capital requirements will result in negative cash flow from operations this fiscal year," the release stated.

 

Despite the halt, JLR continues to incur weekly cash outflows of around $675 million, driven by outgoing obligations such as supplier payments and employee wages. However, this cash burn is likely to moderate in the coming weeks as supplier payments taper. Furthermore, the resumption of sales from existing inventory, estimated to be around 25,000 vehicles, should help ease working capital pressure over the near term.

 

Given the negative outlook, an upgrade is unlikely over the next 12-18 months. The outlook could be revised to stable if JLR's outlook is changed to stable, the release added.

 

Tata Motors had reported a consolidated net profit of INR 39.24 billion for the June quarter, on a revenue of INR 1.04 trillion. On Monday, its shares closed flat at INR 672.50 on the National Stock Exchange.  End

 

Reported by Sunil Raghu

Edited by Deepshikha Bhardwaj

 

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