You are here: Home » Companies » News
Business Standard

Fitch raises outlook on JSW Steel's issue default rating to stable

The agency has also affirmed the company's senior unsecured rating and the rating on its senior unsecured notes at 'BB'

Press Trust of India  |  New Delhi 

The logo of JSW is seen on the company's headquarters in Mumbai. Photo: Reuters
The logo of JSW is seen on the company's headquarters in Mumbai. Photo: Reuters

Ratings today said that it has revised the outlook on Steel to 'stable' from 'negative'.

"Ratings has revised the outlook on Steel Ltd's long-term issuer default rating (IDR) to stable from negative and affirmed the rating at 'BB'," the rating agency said in a statement.

The agency has also affirmed the company's senior unsecured rating and the rating on its senior unsecured notes at 'BB'.

'BB' ratings indicate an elevated vulnerability to default risk, particularly in the event of adverse changes in or economic conditions over time; however, or financial flexibility exists that supports the servicing of financial commitments.

"The outlook revision reflects our view that robust profitability from improved industry fundamentals and a measured approach to capacity expansion will enable JSWS (Steel) to deleverage steadily over the next few years," the statement said.

"We estimate that the company's leverage will remain relatively high, with (FFO) adjusted gross leverage at over 4.0x over the next two years, but risks are partly offset by JSWS's healthy margin, which should stay at over 20 per cent to be well above the median for 'BB' rated steel companies," it said.

The company benefits from efficient operations that cater to structural demand growth in India amid the industry's better demand-supply balance following Chinese capacity cuts, the statement said.

Shares of JSW Steel were trading 0.51 per cent lower at Rs 310.50 apiece on BSE.

First Published: Thu, March 01 2018. 15:51 IST
RECOMMENDED FOR YOU