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S&P Global Ratings has turned negative on Tata Motors
Passenger Vehicles (Tata Motors PVs), warning that the fallout from a recent cyberattack at Jaguar Land Rover (JLR) could drag recovery and weaken the company’s financial strength. The rating agency, however, affirmed its ‘BBB’ long-term credit rating on Tata Motors PVs.
The cyber incident, which halted JLR’s production through September and early October, has sharply dented its output and earnings. S&P estimates the British luxury carmaker’s FY26 revenue will drop 15-18% to about £24 billion, with profit margins narrowing to as low as 3%.
That’s a setback for Tata Motors PVs, now heavily dependent on JLR for over 80% of its earnings following the demerger of its commercial vehicle business earlier this month. S&P expects the parent’s debt-to-EBITDA ratio to climb to as much as 3 times, compared with 1 time before the disruption, while cash generation could fall sharply.
Still, S&P said Tata’s Indian passenger vehicle business—helped by rising consumer demand, leadership in EVs, and new launches—remains a buffer. The company’s funds-from-operations-to-debt ratio could recover toward 40% by FY28 if JLR’s performance stabilises.
The outlook could return to stable if the British subsidiary rebounds faster than expected, S&P said. It also noted that Tata Sons’ continued support and strong domestic fundamentals help contain the downside risks for now.
The cyber incident, which halted JLR’s production through September and early October, has sharply dented its output and earnings. S&P estimates the British luxury carmaker’s FY26 revenue will drop 15-18% to about £24 billion, with profit margins narrowing to as low as 3%.
That’s a setback for Tata Motors PVs, now heavily dependent on JLR for over 80% of its earnings following the demerger of its commercial vehicle business earlier this month. S&P expects the parent’s debt-to-EBITDA ratio to climb to as much as 3 times, compared with 1 time before the disruption, while cash generation could fall sharply.
Still, S&P said Tata’s Indian passenger vehicle business—helped by rising consumer demand, leadership in EVs, and new launches—remains a buffer. The company’s funds-from-operations-to-debt ratio could recover toward 40% by FY28 if JLR’s performance stabilises.
The outlook could return to stable if the British subsidiary rebounds faster than expected, S&P said. It also noted that Tata Sons’ continued support and strong domestic fundamentals help contain the downside risks for now.
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