Moody’s Investors Service has revised Tata Motors’ outlook to negative from positive, citing the severe impact of a cyberattack on its British subsidiary, Jaguar Land Rover (JLR).
While affirming the company’s Ba1 corporate family rating, Moody’s anticipates that recovery in Tata Motors’ credit metrics will take several months. The cyber incident, which led to a complete halt in JLR’s production operations, has raised concerns about the company’s financial stability and operational continuity.
The cyberattack, which occurred on August 31, 2025, disrupted manufacturing at JLR’s facilities in the UK, Slovakia, India, and Brazil. The shutdown affected approximately 33,000 employees and halted the production of around 1,000 vehicles daily. The incident has resulted in significant financial losses, with experts estimating up to £1.7 billion in lost revenues and a potential £2.6 billion cash burn over a 30-day period. Despite efforts to resume operations, full production may take weeks or even months to return to normal.
Moody’s projects that JLR’s production halt will reduce Tata Motors’ consolidated earnings before interest, tax, depreciation, and amortisation (EBITDA) to approximately $850 million for the fiscal year ending March 31, 2026, down from earlier forecasts of around $3 billion. Additionally, higher working capital requirements are expected to result in negative cash flow from operations during this period. The company continues to incur weekly cash outflows of around £500 million, driven by ongoing obligations such as supplier payments and employee wages.
In response to the crisis, the UK government has pledged a £1.5 billion loan guarantee to support JLR’s supply chain during the disruption. However, this intervention has sparked debates about “moral hazard,” with critics arguing that such support could reduce companies’ incentives to invest in cybersecurity or purchase cyber insurance.
The cyberattack has also drawn scrutiny towards Tata Consultancy Services (TCS), JLR’s IT service provider, which had a £800 million contract to bolster cybersecurity. Despite prior warnings about security vulnerabilities, protection investments were deprioritized, leading to questions about the adequacy of JLR’s cybersecurity measures.
Moody’s has indicated that an upgrade in Tata Motors’ rating is unlikely in the next 12 to 18 months. However, the outlook could be revised to stable if JLR’s situation improves and operations return to normal. Investors and stakeholders are advised to monitor developments closely, as the company’s recovery from this incident will significantly influence its financial performance in the coming months.
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