Tata Motors results not to impact its rating: Moody's
Global rating agency Moody's said the April-June quarter result of Tata Motors are 'broadly within expectations' and would have no impact on its rating.autos Updated: Sep 01, 2009 20:58 IST
Global rating agency Moody's on Tuesday said the April-June quarter result of Tata Motors are 'broadly within expectations' and would have no impact on its rating.
"Tata Motors Ltd's consolidated results for its first quarter were broadly within expectations and have no rating implications," Moody's Investors Service said in a release.
The company posted consolidated EBITDA of Rs 596 crore for April-June, down 65 per cent from Rs 1,697 crore in Q1 2008.
"The rating already anticipated the company's weakened consolidated performance, driven by profitability pressures primarily at Jaguar Land Rover," the release added.
It said although consolidated results for April-June 2009 were weak, operating conditions may have bottomed.
"...We expect to see a slow but progressive improvement in performance in the following quarters, as the company benefits from the impact of its cost reduction plans, lower raw material costs and gradually improving demand," it added.
Tata Motors is rated B3, a low investment grade rating, with a stable outlook.
It added that the consolidated result was dragged down by the weak performance of JLR, which reported negative EBITDA of 34 million pound, primarily due to pressure on volumes.
"While underlying demand in JLR's key markets remains weak, and a sustainable improvement in demand is not expected until 2010, the situation in India is - by comparison - showing signs of stabilization," it added.