Tata Motors fell 1.99% to Rs 162.55 at 15:18 IST on BSE on profit booking after a recent rally.
Meanwhile, S&P BSE Sensex was down 181.36 points or 0.46% at 39,405.05.
On BSE, 10.22 lakh shares were traded in Tata Motors counter, compared to a 2-week average of 12.12 lakh shares. The share price hit an intraday high of Rs 166.80 and an intraday low of Rs 161.40. It hit a 52-week high of Rs 282 on 10 September 2018 and a 52-week low of Rs 141.90 on 8 February 2019.
Shares of Tata Motors gained 4.31% in the past four trading sessions to settle at Rs 165.85 yesterday, 27 June 2019, from its close of Rs 159 on 21 June 2019.
According to media reports, Tata Motors Jaguar Land Rover Automotive Plc five-year senior CDS widened two points to seven points upfront, the most since 8 February. The CDS market implied default probability over the next five years is now at 43%, reports added.
CDS (credit default swap) is a financial contract whereby a buyer of corporate debt in the form of bonds attempts to eliminate possible loss arising from default by the issuer of the bonds. A high reading for this crucial gauge means the market is pricing in higher probability of debt default than investors did, on an average, over five years.
Last week, ratings agency Moody's downgraded the corporate family rating (CFR) of Jaguar Land Rover Automotive Plc (JLR) to B1 from Ba3 and the probability of default rating (PDR) to B1-PD from Ba3-PD. Concurrently, Moody's also downgraded the instrument ratings on the bonds to B1 from Ba3. The outlook remains negative.
Also Read
"The downgrade reflects Moody's expectation that leverage will remain elevated and free cash flow negative for fiscal years 2020 and 2021 as Jaguar Land Rover seeks to turn around performance in China, executes its restructuring program and continues to invest in its future model line-up including electrification", said Tobias Wagner, vice-president and senior analyst at Moody's. "The negative outlook further reflects the challenge to turn around financial performance in a subdued market environment and as other manufacturers also prepare to launch electric vehicles. Risks regarding a potential "no-deal Brexit" or potential US tariffs also remain."
Moody's also downgraded Tata Motors' corporate family rating (CFR) and the company's senior unsecured instruments rating to Ba3 from Ba2. The outlook remains negative.
"The downgrade reflects the sustained deterioration in Tata Motors' credit profile, with weaker than anticipated credit metrics -- led by the weak performance of its 100% owned subsidiary Jaguar Land Rover -- and our expectation that it will take longer than we had previously expected for the company's free cash flows to return to positive territory," said Kaustubh Chaubal, a Moody's Vice President and Senior Credit Officer.
Tata Motors' consolidated net profit fell 45.8% to Rs 1,665.03 crore on a 3.7% decline in net sales to Rs 85,676.33 crore in Q4 March 2019 over Q4 March 2018.
Tata Motors is an automobile manufacturer with a portfolio that includes a wide range of cars, utility vehicles, trucks, buses and defence vehicles.
Powered by Capital Market - Live News
Disclaimer: No Business Standard Journalist was involved in creation of this content