Ratings agency Moody's Investors Service (Moody's) on Thursday, November 9, upgraded Jaguar Land Rover (JLR) corporate family rating (CFR) to Ba3 from B1. The agency also upgraded the automaker's probability of default rating (PDR) to Ba3-PD from B1-PD.
"The outlook on all ratings remains positive," Moody's said in a release.
The US-based agency said the latest upgrade in JLR's ratings reflected the company's strong operating performance over the past 12 months. The automaker has ramped up its production volumes over the past four quarters, leading to a nearly 25% growth in one year. The wholesale volumes have grown to 3,64,000 units at the end of September 2023, from just 2,93,000 a year ago.
"Moody's forecasts wholesales to increase further to at least 4,00,000 by financial year-end 31 March 2024, as the company has previously indicated. Sales continue to be backed by a strong order book, which at the end of September consisted of 1,68,000 new vehicles to be delivered, 77% of which were Range Rover, Ranger Rover Sport and Defender models."
The automaker has also managed its liquidity profile well, with £4.3-billion cash and short-term investments as of September 30, 2023. JLR also said it has committed a £1.5-billion revolving credit facility (RCF) maturing in 2026.
"JLR has continued to generate good free cash flows in the first half of financial year 2024, reaching about £0.8 billion, and Moody's expects this to increase further in the second half of the year, reaching about £2 billion for the year," it added.
Moody's now expects JLR to sustain its volume growth over the next 12-18 months and to follow a balanced financial policy with a focus on deleveraging.
Fully owned by Tata Motors Limited (TML), the UK automaker manufactures premium passenger cars under the Jaguar and Land Rover trustmark brands, including Range Rover, Defender and Discovery. The company managed to sell 3,21,000 units in FY2023 generating a total revenue of £22.8 billion. JLR sold 42% of its products in Europe, 25% in North America, 14% in China and 18% in other overseas markets.
Also Read:Moody's affirms Baa3 ratings for India, says economy set to grow rapidly by global standards
(Edited by : Shoma Bhattacharjee)
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