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Tata Motors share price falls nearly 3% on credit rating downgrade by Moody's

Tata Motors share price lost up to 2.89% to 154.55 level compared to the previous close of 159.15 on BSE.

twitter-logo BusinessToday.In        Last Updated: June 21, 2019  | 10:59 IST
Tata Motors share price falls nearly 3% on credit rating downgrade by Moody's

Tata Motors share price fell in early trade today after global rating agency Moody's Investors Service downgraded the automaker's credit rating by a notch on the floundering performance of its British subsidiary Jaguar Land Rover. Tata Motors share price lost up to 2.89% to 154.55 level compared to the previous close of 159.15 on BSE.

Tata Motors share opened at a loss of  2.67% at 154.90 on BSE.

Tata Motors share has lost 48.96% during the last one year and fallen 9.36% since the beginning of this year.

Tata Motors market capitalisation stood at Rs 45,201 crore on BSE.

17 of 37 brokerages rate the stock "buy" or 'outperform', 16 "hold", three "underperform" and one "sell", according to analysts' recommendations tracked by Reuters.

Tata Motors share price was trading below its 50-day and 200-day moving average of 177.44 and 182.01 level.

The corporate family rating and the company's senior unsecured instruments rating have also been downgraded to "Ba3" from "Ba2", with a negative outlook.

"The downgrades reflect sustained deterioration in Tata Motors' credit profile, with weaker than anticipated credit metrics--led by the weak performance of JLR," Kaustubh Chaubal, a vice president and senior credit officer at Moody's said in a note.

The agency expects it will take longer than previously expected for JLR to improve its free cash flows to the positive territory.

It also downgraded the corporate family rating (CFR) of JLR to "B1" from "Ba3", with a negative outlook.

He said JLR's leverage will remain elevated and free cash flow negative for fiscal years 2020 and 2021 as it seeks to turnaround performance in China, executes its restructuring programme and continues to invest in its product development, including electrification, another vice-president Tobias Wagner said.

Edited by Aseem Thapliyal

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