Fitch Ratings Ltd indicated negative outlook for Tata Motors Ltd and downgraded the auto major's long-term issuer default rating to B from BB-.
It cited sharply weaker profitability and cash flow generation over the next few years. This is another blow to the already battered company, which is down about 62% from its share price in January.
The rating agency’s negative outlook reflects prolonged pain from the covid-19 shock. “We estimate that TML's consolidated Ebitda (earnings before interest, tax, depreciation and amortisation) generation will drop by nearly 50% year-on-year (yoy) in the financial year ending March 2021 (FY21) and will remain below FY19 levels in FY22, even with a recovery," it said.