Daily Brief Credit: Morning Views Asia: KWG Living Group and more

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

• KWG Living Group
• Lifestyle International Holdings
• Vedanta Resources

Tata Motors’ Q1/22-23 results continued to be weaker than expected as well as guided, mainly due to the weakness in Jaguar Land Rover (JLR), which more than offset Tata Motors India’s reasonable performance. Gross leverage remained almost stable, given the small increase in debt and minimal decline in EBITDA. However, net leverage deteriorated significantly, due to the increase in net debt. Liquidity is adequate. The debt maturity profiles for both JLR and Tata Motors India are evenly spaced out.

Despite management’s consistent guidance and hints at an improvement in the situation, retail sales continued to be materially lower on a y-o-y basis (albeit relatively flat q-o-q). We expect the semiconductor shortage to persist for at least another 18 months. The industry will need to rebuild the chip and component supply chains, which could take time. Thus, we have a cautious view on management’s persistent optimism.