Tata Motors rose 1.14% to Rs 75.50, extending gains for second day.
Shares of the auto maker have added 3.56% in two sessions from its recent closing low of Rs 72.90 recorded on 15 April 2020.
Meanwhile, Fitch Ratings has downgraded the long-term issuer default rating (IDR) of Tata Motors (TML) to 'B' from 'BB-' and placed 'negative' outlook on the same.
The downgrade reflects Fitch's significantly lower expectations for TML's profitability and cash flow over the next few years due to the effect of the coronavirus pandemic on demand and disruption to TML's Indian operations as well as to key auto markets globally that are served through its fully owned UK-based subsidiary, Jaguar Land Rover Automotive.
The ratings agency said that it estimates that TML's consolidated EBITDA generation will drop by nearly 50% year-on-year (YoY) in the financial year ending March 2021 (FY21) and will remain below FY19 levels in FY22 even with a recovery.
It further expects sharp deterioration in TML's free cash generation and leverage, as the company will have limited flexibility to lower heavy investment, despite lower profitability, particularly at JLR, as it needs to bolster its long-term competitiveness in view of emerging industry trends.
The negative outlook reflects risks to TML's financial profile from a prolonged pandemic that could result in further deterioration in TML's profitability and exert greater pressure on its liquidity than we currently envisage.
The auto manufacturer's consolidated net profit surged 106.4% to Rs 1,738.30 crore on a 6.8% decline in net sales to Rs 71,051.42 crore in Q3 December 2019 over Q3 December 2018.
Tata Motors is a leading global automobile manufacturing company. Its diverse portfolio includes an extensive range of cars, sports utility vehicles, trucks, buses and defense vehicles.
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