Tata Motors Gets Upgraded To 'BB/Stable' By S&P Global Ratings

Rating agency S&P Global Ratings has upgraded the credit ratings of Tata Motors Limited from 'BB-/Stable' to 'BB/Stable'. The company announced the revised ratings through securities filing on Wednesday.

The upgrade in ratings is on account of earnings improvements, potential deleveraging, and a stable outlook. Tata Motors Ltd.'s cash flow should strengthen over the next 12-18 months due to improving operating conditions in India and at its 100% subsidiary.

Jaguar Land Rover Automotive Plc, the S&P statement added. Solid earnings and free operating cash flow are expected to support debt reduction. The debt reduction at Tata Motors Ltd. will accelerate if it successfully lists its subsidiary, Tata Technologies Ltd., as planned. The agency also upgraded the rating for TML's core subsidiary, TML Holdings Pte Ltd from "BB-" to 'BB'.

S&P Global Ratings said, "we may lower the ratings if Tata Motors' earnings decline materially and its cash flow drops such that its consolidated funds from operations to debt ratio remains below 20% on a sustained basis".

The stock price of Tata Motors Ltd closed 1 per cent higher to Rs 478.05 per share over previous day's closing. Its 52-week high is at Rs 494.50 per share and 52-week low is at Rs 336.05 per share. In last one year the stock price has rallied by nearly 9.95 per cent while in three years it has skyrocketed to 511.71 per cent.