S&P upgrades Jaguar Land Rover

S&P said it upgraded its ratings on Jaguar Land Rover Automotive plc and its debt to BB from BB-. The recovery rating on the debt is unchanged at 3 (65%).

“The upgrade results mainly from the upward revision of our forecasts of JLR's FOCF for fiscals 2024 and 2025, and the associated improvement in credit metrics. Through the first half of fiscal 2024, JLR continued to display improving FOCF, which totaled £751 million, supported by growth of sales volumes, with wholesale numbers rising to 190,000 vehicles, improving profitability, and working capital cash inflows,” S&P said in a press release.

In its base case, the agency said it estimates JLR’s S&P Global Ratings-adjusted EBITDA margins (after deducting capitalized development costs) to beat 10% for the full year, after 8% in fiscal 2023, citing an improving product mix, higher volumes and cost-cutting measures.

The outlook is positive.

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