Business & Investment

Moody’s Revises Tata Steel’s Outlook to “Stable”

New Delhi: Moody’s Investors Service said Thursday that it changed Tata Steel Ltd’s outlook from negative to stable.

Tata Steel is one of the top steel producers in the country with an annual installed capacity of 20.6 million tonnes (MTPA).

Rating agencies have “changed Tata Steel’s outlook from negative to stable,” he said.

India’s steel consumption fell 55% in the first quarter of fiscal 2020-21 following a national blockade to contain the COVID-19 pandemic, he added.

However, since the economic opening in June 2020, stagnant demand from the end-user industry, especially sectors such as automobiles, white goods manufacturing, construction and infrastructure, has boosted steel consumption.

According to the agency, a mild industrial environment, government support policies in the form of large-scale infrastructure investment, and a significantly better outlook for the automotive industry have supported India’s steel prices.

According to Moody’s, these situations have driven TSI’s record profitability in the last quarter. Its profitability improved steadily from Rs 4,969 in the first quarter to 18,948 EBITDA / ton, the highest in 10 years in the third quarter of 2009.

Moody’s predicts that TSI’s long-term sustainable EBITDA / ton for fiscal year 2022 will be 13,200 rupees, forming a 30% gap compared to the December quarter. Therefore, the company has considerable buffers, especially given a benign operating environment.

In addition, a backward link to your overall iron ore needs will provide resilience to profitability even if steel prices fall sharply.

For the company’s European operations, Tata Steel’s European operations (TSE) shipments will decline by approximately 10% during the 2021 fiscal year, according to Moody’s.

Europe’s economic activity has improved since the early months of the pandemic, but has been affected by further blockades and a weaker winter quarter, the agency said.

Kaustab Chaubal, Vice President and Senior Credit Officer at Moody’s, said: For the next 12-18 months. ”

The rating measures also reflect the company’s aggressive financial management during the pandemic and its publicly stated goal of reducing total debt by at least US $ 1 billion annually and prioritizing leverage over capital investment. He added that he was.

Moody’s Revises Tata Steel’s Outlook to “Stable” Moody’s Revises Tata Steel’s Outlook to “Stable”

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