MOODY flags length

MOODY classifications by reviewing Tata Motors reviewed to the negative of the positive after an electronic attack on Jaguar Land Rover (JLR). The agency said on Monday that the accident raised concerns about the operational disruption and credit recovery.

Moody’s Tata Motors’ Ba1 Corporate Rating (CFR) confirmed, but it has been marked with concerns about the delay in recovery.

“The change in expectations to negativity from positivity reflects our view that a full recovery in credit standards will likely take several months,” said Sweeta Patodia, Assistant Vice President and Analyst in Moody’s rankings.

The classification agency said that the accident confirms the risks of customer relationships captured under social risk factors within the ESG framework, describing it as the main driver behind the classification.

The effect is particularly severe as JLR is scheduled to contribute more than 90 % of the unified Ebitda for Tata Motors Post Demerger for its business, on October 1, 2025, note Moody’s.

JLR operations have been stopped for four weeks and will not resume until October 1. Even after reproducing, it may take months to normalize.

Moody’s estimates that Halt will reduce the uniform Ebitda for Tata Motors to about 850 million dollars for the 25-26 fiscal year, down from its previous expectations of about 3 billion dollars. The higher capital needs are also expected to pay the cash flow from operations to a negative area this fiscal year.

Despite the freezing of production, JLR is still burning through about 500 million pounds ($ 675 million) per week due to the obligations of suppliers and employee. This external flow is expected to extend with the ease of suppliers payments. The company also has about 25,000 cars in the stock, which may help relieve working capital pressure through the resuming sales.

However, MOODY warned that prolonged disorder or delay in increasing operations may deepen profits and strike cash flow. It is unlikely to upgrade within the next 12-18 months. She said that expectations may be stable in case of improved JLR conditions.

Meanwhile, JLR announced on September 29 that it plans to partially restart production in the coming days.

Moody’s said the Tata Motors’ BA1 classification reflects its global presence in the luxury market via JLR, expanding the fingerprint in the passenger vehicle sector in India, and improving the credit file by reducing debt and profit growth.

She added: “The TML’s BA1 classification includes our expectations for extraordinary support from the mother of Tata, which leads to a first -class rise in its classification.”