New Delhi: Rating agency ICRA has downgraded automobile major Tata Motors’ non-convertible debentures, long-term loans, long term fund-based facilities and long-term non-fund-based facilities to “AA-“ (negative) from “AA” (negative).
The revision in the rating reflects the continued deterioration in the financial profile of Jaguar Land Rover PLC (JLR), a wholly-owned subsidiary of Tata Motors Limited, amid headwinds in China and Europe (including the UK) markets, ICRA said in a statement.
The rating agency has however retained ICRA A1+ rating for Commerical paper programme, Short term debt programme and short-term non-fund-based facilities.
“The Negative outlook reflects ICRA’s expectations of a further deterioration in the credit profile of TML, primarily due to weakening of JLR’s credit metrics amid rising pressures on its sales volumes. The ratings may be downgraded if there is further weakening of JLR’s performance or weakening of performance at TML standalone level. The outlook may be revised to Stable if the credit profile of TML improves due to turnaround of JLR operations against a backdrop of improved operating leverage at TML (standalone) and deleveraging measures to be undertaken by the management” ICRA said.