)
Fitch Ratings has revised its outlook on Tata Steel and its European subsidiary from negative to stable on expectations of improvement in the company's financial profile in the near-to-medium term.
Fitch expects Tata Steel's strong cash generation to support deleveraging through the medium term, though debt levels are likely to peak this financial year, as the company expands capacity in India. The agency affirmed the long-term foreign currency issuer default rating on Tata Steel at 'BB+' and on the long-term foreign currency Indian depositary receipt (IDR) of wholly-owned subsidiary Tata Steel UK Holdings at 'B+'.
Tata Steel's earnings before interest, tax, depreciation and amortisation (Ebitda) rose to Rs 11,400 crore during April-December 2013 from Rs 8,200 crore in the year-ago period, driven by growth in its India sales and improved profitability of the European business. Fitch expects the growth in sales and the strong profitability to be sustainable.
