Moody’s Upgrades Jaguar Land Rover’s Ratings, Outlook Remains Positive

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Moody’s Investors Service has upgraded Jaguar Land Rover’s corporate family rating to Ba2 from Ba3, reflecting the company’s strong operating performance over the past year. The ratings agency also upgraded JLR’s probability of default rating to Ba2-PD from Ba3-PD, citing improved financial stability and sustained volume growth.

Key Highlights Of The Ratings Upgrade
- JLR’s backed senior unsecured instruments ratings have been upgraded to Ba2 from Ba3.
- The company has demonstrated consistent earnings growth, driven by increased production volumes and strong demand for Range Rover, Range Rover Sport, and Defender models.
- Moody’s expects JLR’s wholesale volumes to exceed 400,000 units by the end of the financial year, supported by a robust order book.

Factors Driving The Upgrade
- JLR’s liquidity profile remains strong, with £4.3 billion in cash and short-term investments as of September 2023.
- The company has committed a £1.5 billion revolving credit facility maturing in 2026, ensuring financial flexibility.
- Free cash flows reached £0.8 billion in the first half of financial year 2024, with projections indicating a rise to £2 billion by year-end.

Market Position And Future Outlook
- JLR sold 321,000 units in FY2023, generating total revenue of £22.8 billion.
- The company’s balanced financial policy and focus on deleveraging are expected to sustain long-term growth.
- Moody’s anticipates continued volume expansion over the next 12 to 18 months, reinforcing JLR’s market position.

About Jaguar Land Rover
Jaguar Land Rover, a subsidiary of Tata Motors, manufactures premium passenger vehicles under the Jaguar and Land Rover brands. The company has a strong presence in Europe, North America, China, and other global markets.

Sources: Moody’s Investors Service, CNBC-TV18, ResearchPool.