Tata Group-backed once-popular scrip Tata Motors is now changed to Tata Motors Passenger Vehicles or TMPV on BSE and NSE. This is part of demerger scheme where Tata Motors was split into passenger vehicles and commercial vehicles unit. The CV unit is expected to list in November month. On October 24th, when the name changed, TMPV traded in narrow range, mostly flat on BSE. However, the stock held above Rs 400 mark. Investors are cautious after global rating agency S&P lowered its credit ratings on Tata Motors Passenger Vehicles and the reason is the luxurious PV brand Jaguar Land Rover (JLR).
Tata Motors Passengers Vehicles Credit Rating:
S&P has revised its outlook on Tata Motors PVs and TML Holdings Pte. Ltd. to negative and affirmed 'BBB' long-term issuer credit rating. Also, the rating agency lowered the long-term issue rating on the senior unsecured notes that TML Holdings issued to 'BBB-' from 'BBB'.
According to S&P, the cash flow at TMPV is expected to be significantly lower due to prolonged operational disruption at its wholly owned subsidiary, Jaguar Land Rover Automotive PLC (JLR).
JLR recently faced a sever cyberattack which pushed the luxury carmaker to halt its production globally for more than a month. This cyberattack is expected to heavily impact JLR which in turn will be spoilsport for TMPV.
Since the start of October, JLR has resumed and gradually ramping up product. As part of the demerger, JLR is part of TMPV. But here's where everything gets tricky for Tata Motors Passenger Vehicles.
After demerger of commercial vehicles, Tata Motors PV's more than 80% of the earnings come from JLR. Hence, the cyber incident at JLR could be prolonged and lead to Tata Motors PVs' credit metrics staying weaker for longer.
What S&P Expects For JLR?
The rating agency is estimating revenue decline of 15%-18%, to about £24 billion in fiscal 2026 (ending March 31, 2026). JLR's profitability is likely to take a hit because its investment intensity will remain steady.
The company's S&P Global Ratings-adjusted EBITDA margins will decline to 3%-5% in fiscal 2026, from 7.6% in fiscal 2025.
Furthermore, S&P pointed out that the cyberattack, which began on Aug. 31, 2025, has materially hampered JLR's operations. Production was completely halted throughout September and the first week of October. JLR recently reported that the groupwide system shutdown drove down wholesale and retail volumes in September 2025 quarter by 24.2% and 17.1%, respectively, versus the same period a year ago.
That being said, the impact of JLR's loss of volumes is more pronounced post the demerger.
"We previously expected that the demerger of the commercial vehicles business would be neutral to our rating on Tata Motors PVs. We estimated the company's net debt-to-EBITDA ratio at about 1.0x at the time of the demerger," said S&P's note.
S&P now projects Tata Motors PV ratio net debt to EBITDA to trend closer to 2.5x-3.0x in fiscals 2026 and 2027. Its ratio of funds from operations (FFO) to debt is also likely to weaken to 15%-25% in fiscals 2026 and 2027 (pro forma the demerger), from more than 100% in fiscal 2025.
How Can Tata Motors Passenger Vehicles Turn The Tide For JLR?
In S&P's view, a recovery in JLR's earnings is subject to a series of uncertainties both related to market conditions and to the consequences of the cyberattack. While JLR has resumed production operations, the ramp up to full capacity will likely be gradual.
Despite this, there could still be some permanent loss of production volume. This, in conjunction with U.S. tariff-related headwinds, and a potential delay in key product launches could pose further downside risks. Also, such risks would intensify if rising sales volumes in other regions are not enough to offset prolonged weakness in China.
JLR's revenue will grow 3%-7% while its S&P Global Ratings-adjusted EBITDA margin will improve to 4%-6% in fiscal 2027. This will translate to 6%-7% revenue growth and 5%-5.5% EBITDA margins at Tata Motors PVs during the same period, it said.
Excluding JLR, Tata Motors PV credit metrics look stronger than the luxury car brand.
Tata Motors Passenger Vehicles Outlook:
S&P believes Tata Motors PVs' India passenger vehicle business will generate sufficient cash flow to fund its investments of up to Indian rupee (INR) 60 billion annually, with limited dependence on external debt over the next two years. This, alongside a recovery in JLR's operations, will drive an improvement in Tata Motors PVs' FFO-to-debt ratio toward 40% by fiscal 2028.
TMPV Share Price:
At the time of writing, TMPV (formerly Tata Motors) share price performed at Rs 404.75 apiece, marginally lower on BSE, with market cap of Rs 1,49,042.36 crore. The stock opened at Rs 406.05 apiece, and has touched an intraday high and low of Rs 408.50 apiece and Rs 404 apiece.
Currently, the stock is near its intraday low.
Tata Motors Demerger:
The Tata Motors demerger is of 1:1 ratio. For every one share in Tata Motors, eligible shareholders will keep 1 share as TMPV now and 1 new share will be added to portfolio as TML Commercial Vehicles which is free. This simply means 1 share of Tata Motors is split into two.
As per Kotak Securities note, TMLCV shares are not tradable yet, so the Sellable Quantity will be 0 until listing by the exchanges (expected end of November or early December 2025). You can continue to buy or sell Tata Motors normally, and your Realized P&L will adjust correctly after the price allocation.
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