Tata Motors PV slips after S&P Global revises outlook to 'Negative'

The global ratings agency expects the cash flow at Tata Motors Passenger Vehicles to be significantly lower due to a prolonged operational disruption at its wholly owned subsidiary, JLR

Tata Motors Passenger Vehicles shares slipped by 0.4 per cent, logging an intra-day low at ₹404 per share on BSE after credit agency S&P Global Ratings revised its outlook to 'Negative' owing to slow recovery at Jaguar Land Rover (JLR).

 

At 12:02 PM, Tata Motors PV's share price was down 0.25 per cent on BSE at ₹404.85 per share. In comparison, the BSE Sensex was down 0.27 per cent at 84,327.39.

 

The market capitalisation of the company stood at ₹1,49,060.77 crore. The 52-week high was at ₹549.96 per share, and the 52-week low was at ₹335.3.  

Why is S&P Global Ratings cautious on Tata Motors post demerger?

The global ratings agency expects the cash flow at Tata Motors Passenger Vehicles (formerly known as Tata Motors) to be significantly lower due to a prolonged operational disruption at its wholly owned subsidiary, Jaguar Land Rover Automotive PLC (JLR).

 

 

The cyberattack, which began on August 31, 2025, has materially hampered JLR's operations, according to S&P Global. Production was completely halted throughout September and the first week of October. JLR recently reported that the groupwide system shutdown drove down wholesale and retail volumes in the September 2025 quarter by 24.2 per cent and 17.1 per cent, respectively, versus the same period a year ago.

 

JLR has since resumed production and is gradually ramping up. Post the demerger of the commercial vehicle operations, JLR accounts for more than 80 per cent of Tata Motors' PVs' earnings.

 

S&P Global Ratings has reaffirmed Tata Motors Passenger Vehicles' long-term credit rating to 'BBB'; however, it has downgraded the outlook to 'Negative' from 'Stable'. For JLR, S&P Global has revised long-term ratings to 'BBB-' with a 'Negative' outlook.

 

The ratings agency estimates JLR's revenue to decline 15 per cent to 18 per cent, to about £24 billion in fiscal 2026 (ending March 31, 2026). JLR's profitability will also take a hit because its investment intensity will remain steady, S&P Global noted. The company's S&P Global Ratings-adjusted Earnings before interest, tax, depreciation and amortisation (Ebitda) margins are anticipated to decline to 3 per cent to 5 per cent in fiscal 2026, from 7.6 per cent in fiscal 2025. 

 

Previously, S&P Global expected that the demerger of the commercial vehicles business would be neutral on Tata Motors PVs. It estimated the company's net debt-to-Ebitda ratio at about 1.0x at the time of the demerger. However, given the subsequent cyberattack at JLR since its forecast and the subsequent loss of revenue, S&P Global now projects Tata Motors PVs' ratio of adjusted net debt to Ebitda to trend closer to 2.5x-3.0x in fiscals 2026 and 2027. 

 

JLR’s earnings recovery faces multiple uncertainties from both market conditions and the recent cyberattack. Although production has resumed, returning to full capacity will likely be gradual, with some permanent volume loss possible, according to S&P Global. Added risks include US tariff headwinds and potential delays to key launches, with downside worsening if growth in other regions fails to offset prolonged weakness in China. 

 

Tata Motors demerged its commercial vehicles business into a separate legal entity, TML Commercial Vehicles Ltd., with effect from October 1, 2025. Commercial vehicles previously accounted for 15 per cent to 20 per cent of revenue and up to 15 per cent of the reported Ebitda of the parent group. The segment generated higher returns on capital than other divisions and carried low leverage.

 

For TML Holdings Pte. Limited, the ratings agency has revised the rating to 'BBB-' from 'BBB'.