Live news , top stories, corporate news, company news, sector news, economy news, results analysis news, ceo interviews, fund manager interview, advisor interview, market news, bazaar talk, hot stocks news, ipo news, commodities news, mutual fund news, insurance news, news wire
17 February, 2019 03:48 IST
Fitch revises outlook on Tata Motors to negative; affirms at BB+
Source: IRIS | 21 Sep, 2018, 10.55AM
Comments  |  Post Comment

Fitch Ratings has revised the Outlook on Tata Motors (TML) to Negative from Stable and has affirmed its Long-Term Issuer Default Rating at 'BB+'.

The revision of the Outlook reflects Fitch's expectations of rising negative free cash flow (FCF) over the fiscal years ending March 2019 (FY19) and FY20, following upward capex revisions at TML's fully owned subsidiary, Jaguar Land Rover Automotive plc (JLR, BB+/Negative). We expect FCF to improve post FY20, but the ratings may be downgraded if we believe TML's FCF is not likely to improve in line with our expectations. The Outlook revision also takes into account evolving risks, including a disorderly Brexit, higher global tariffs and slower execution of JLR's plan to move away from diesel-based powertrains in Europe. Fitch revised its Outlook on JLR to Negative from Stable on 13 September 2018.

The affirmation of TML's rating reflects the robust positioning of JLR - which accounts for more than 65% of TML's EBITDA generation - in the premium segment and a financial profile that will remain solid even after considering substantial investment in capacity expansion and new technologies over the next few years. The rating, which includes a one-notch uplift from TML's 'BB' standalone rating on its linkage with its parent, Tata Sons Limited (TSOL), also reflects its leading position in India's commercial-vehicle market and the recovering passenger vehicle business, after successful new-product launches in the previous few years.

Fitch expects a gradual improvement in TML's profitability that has weakened in the previous few years due to weaker profitability at JLR. This should help FCF turn positive in FY21 and curb deterioration in consolidated leverage - as measured by net adjusted debt/EBITDAR, excluding TML's auto-financing subsidiary, TMF Holdings Limited - above 1.5x, the level where Fitch may consider negative rating action.

Shares of the company gained Rs 3.6, or 1.42%, to trade at Rs 256.30. The total volume of shares traded was 207,064 at the BSE (10.46 a.m., Friday).

Tata Motors Limited   (Q,N,C,F)*

Comments Post comment 
 Post Comment
Name Email
Security Code type    into this box
Company Update
Lupin launches Clobazam oral suspension - 15-Feb-2019 16:37
Muthoot Finance to raise upto Rs 7.50 bn through NCDs - 14-Feb-2019 11:01
Zydus gets USFDA nod for Triamterene & Hydrochlorothiazide capsules - 13-Feb-2019 13:10
L&T Construction bags contract for construction of hospitals - 13-Feb-2019 11:56
Strides receives USFDA approval for Triamcinolone Acetonide cream - 13-Feb-2019 11:52
Lupin receives FDA approval for Fluoxetine Tablets - 12-Feb-2019 16:32
Lupin launches Tadalafil Tablets - 12-Feb-2019 16:29
C & C Constructions JV wins order worth Rs 1.24 bn from DFCCIL - 12-Feb-2019 13:44
Tata Motors group global wholesales up 12% in January 2019 - 12-Feb-2019 13:39
Alembic Pharma announces completion of USFDA inspection at Aleor Dermaceuticals - 12-Feb-2019 10:37
L&T Hydrocarbon Engineering bags order from Sonatrach-Algeria - 12-Feb-2019 10:32
Home  |   Shares  |   F&O  |   Mutual Funds  |   Loans  |   Insurance  |   News Centre
Wealth Tracker  |   Newsletters  |   Tax Corner  |   NRI Centre  |   Advertise
© All rights reserved. IRIS Business Services Limited
A Disclaimer