Moody’s Ratings has shifted its outlook on Tata Motors from positive to negative, citing a major cyber-attack that shut down production at its Jaguar Land Rover (JLR) unit in the UK. The move comes just days before Tata Motors plans to split off its commercial vehicle business.
Despite the downgrade, Moody’s kept Tata Motors’ Ba1 corporate family rating unchanged. Sweta Patodia, an analyst at Moody’s, explained, “We’re seeing a full recovery in credit metrics likely taking several months.”
The cyber incident underscores risks to customer relations, a key part of environmental, social, and governance (ESG) factors, which played a big role in Moody’s decision.
Starting October 1, after the demerger, JLR will drive more than 90% of Tata Motors’ overall earnings before interest, taxes, depreciation, and amortization (EBITDA). That close tie means trouble at JLR hits Tata Motors hard.
Moody’s now forecasts Tata Motors’ consolidated EBITDA dropping to about $850 million for the fiscal year ending March 2026—way down from the earlier $3 billion estimate. The firm also predicts negative cash flow from operations this year, thanks to rising working capital needs.
Even with production stopped, JLR faces hefty weekly cash drains of around GBP 500 million ($675 million) for supplier payments and employee salaries. Moody’s expects this to ease soon as supplier bills taper off.
Selling from JLR’s stockpile of about 25,000 vehicles should help relieve some short-term cash squeeze. Still, if the production halt drags on or restarts slowly, earnings and cash flow could take an even bigger hit.
With this negative outlook, Moody’s doesn’t see an upgrade in the next 12 to 18 months. Things could stabilize if JLR’s own outlook brightens.
In the meantime, JLR announced it plans to restart some manufacturing operations in the coming days, offering a glimmer of hope amid the cyber-attack fallout.
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