Moody’s changes JSW Steel ratings
Moody’s Investors Service has changed JSW Steel ratings outlook to stable from negative, citing sustained improvement in JSW’s operating and financial performance over the last four quarters.
The rating agency also said that it believes that completion of the company’s capex cycle will result in free cash flows turning positive and applied towards debt reduction. It maintained the rating at Ba3.
“Steel prices in India have recovered from the lows observed during the fiscal year ended March 2016, following various measures by the Government of India to curb imports, and the positive momentum across global steel markets since April 2016,” said Kaustubh Chaubal, a Moody’s Vice President and Senior Analyst.
He said this situation has led to a marked improvement in JSW SteelBSE -1.42 %’s operating performance so far in FY2017. He added that an addition to crude steel capacity by 25%, increasing proportion of high-margin value-added products, and continuing cost rationalization initiatives supported the improvement in JSW’s profitability, despite sporadic raw material cost pressures.
JSW Steel on Tuesday posted a consolidated net profit of Rs 730 crore in the December quarter against net loss of Rs 709 crore logged in the same period last year.