Hi Dikshant,

I ran your code exactly same, but found no issues. Coverage was 100%.
Please refer below codes -

//LeadProcessor.apxc

global class LeadProcessor implements Database.Batchable<Sobject> 
{
    global Database.QueryLocator start(Database.BatchableContext bc) 
    {
        Database.QueryLocator qObj;
        qObj = Database.getQueryLocator('select Id, Name, LeadSource, Rating from Lead');
        return qObj;
    }

    global void execute(Database.BatchableContext bc, List<sObject> records)
    {
        
        List<Lead> leadRecords = (List<Lead>) records;
        List<Lead> updatingLeadList = new List<Lead>();
            for (Lead leadObj : leadRecords) 
            {
                leadObj.LeadSource = 'Dreamforce';
                updatingLeadList.add(leadObj);
            }
        if(!updatingLeadList.isEmpty()){
            update updatingLeadList;
        }
        
    }    

    global void finish(Database.BatchableContext bc){   }    
}

//LeadProcessorTest.apxc

@isTest 
private class LeadProcessorTest 
{
    private static testMethod void LeadProcess() 
    {
        List<Lead> lstLead = new List<Lead>();
        for(Integer i=0 ;i <200;i++)
        {
            lstLead.add(new Lead(LastName ='LastName'+i, Company ='demo'+i, City='New York', Country='US', LeadSource='Phone inquiry'));
        }
        
        insert lstLead;
        
        Test.startTest();

            LeadProcessor obj = new LeadProcessor();
            DataBase.executeBatch(obj); 
            
        Test.stopTest();
    }
}

FYR - https://developer.salesforce.com/forums/?id=906F0000000D9AUIA0

Hope this helps!