S&P turns negative on Tata Motors PVs over slow JLR recovery, keeps 'BBB' rating

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.