Moodys downgrades Tata Motors with negative outlook on JLR worries
Moody's downgrades Tata Motors with negative outlook on JLR worries By Press Trust of India | Mumbai | Last Updated at June 20 2019 20:24 IST. Global rating agency Moody's Investors Service Thursday downgraded Tata Motors' credit rating by a notch on the floundering performance of its British subsidiary Jaguar Land Rover. "The downgrades reflect sustained deterioration in Tata Motors' credit profile, with weaker than anticipated credit metrics--led by the weak performance of JLR," Kaustubh Chaubal, a vice president and senior credit officer at Moody's said in a note. In the case of the parent Tata Motors, the specific triggers for the downgrade are the high debt levels (where its debt to operating profit ratio has gone to 5.3 times) and operating margins dipping to 0.9 percent, the agency said. While restructuring efforts will prevent a further deterioration in credit metrics, the agency said it expects leverage will remain around 5 times the operating profits, margins at a weak under 3 per cent, and cash flows negative for at least the next 18-24 months.