Moodys downgrades credit rating of Motherson Sumi Systems

Motherson Sumi Systems on Saturday informed the bourses that the rating agency Moody’s Corporation has assigned Ba1 corporate family rating (CFR) to the flagship company of Motherson Group. Moreover, the agency has revised its outlook to a rating under review from negative.

The rationales behind this rating revision are the rapid and widening spread of Coronavirus outbreak, deteriorating global economic outlook, falling oil prices and asset price declines, which have led to a severe and extensive credit shock across many sectors, regions and markets. This has made the company more vulnerable to the shift into the outbreak continuing a further spread.  

The rating agency also cited that the auto parts supplier sector has been one of the most significantly affected sectors, given its sensitivity to consumer demand and sentiment. More specifically, the weaknesses in Motherson's credit profile, including its exposure to final consumer demand for automobiles, has left it vulnerable to shifts in market sentiment in this unprecedented operating conditions and Motherson remains vulnerable to the outbreak.

The stock of Motherson in today’s session was trading in a negative terrain and settled at Rs 60.8, down by 3.9 per cent.