Tata Motors is worth nothing without Jaguar Land Rover, says CLSA

With the coronavirus pandemic crippling demand for automobiles worldwide, Tata Motors is worth nothing without its luxury unit Jaguar Land Rover, according to CLSA.

The $3.7 billion Indian auto firm faces a significant increase in debt due to the crisis, and its plan to deleverage may be delayed by four to six quarters, CLSA said. It has already received a lifeline from parent Tata Sons in the form of a preferential equity allotment, and the brokerage thinks further aid could be required.

The virus has also been a setback for Jaguar Land Rover, which was beginning to show signs of a turnaround late last year from the combined negative impact of a slowdown in China, Brexit and European emissions rules. Tata Sons had been looking for a strategic partner for the business but pledged it wouldn’t sell JLR.