ICRA revises long-term outlook on JSW Steel from stable to negative

Wednesday, 04 September 2019 10:51:15 (GMT+3)   |   Istanbul
       

Indian rating agency ICRA  has revised its outlook on the long-term rating for Indian steelmaker JSW Steel from “stable” to “negative” due to a reduction in the company’s profitability and its high debt levels driven by lower domestic and international steel prices and weak domestic demand, according to a report by ICRA.

ICRA has also stated that the outlook might be revised to stable if an improvement in the steel sector conditions takes place and causes financial performance to improve.

The ratings factor in the company’s exposure to price risks due to limited captive sources of raw materials, especially in case of coking coal, which has exhibited high price volatility in the recent past, according to ICRA.

While four out of six iron ore mines of JSW Steel are already operational, the remaining two mines are likely to start operations before the end of financial year 2019-20, resulting in captive iron ore availability of about 5 million mt during the year. Additionally, the company emerged as a preferred bidder for an additional three iron ore mines auctioned by the Karnataka government in July 2019, having aggregate resources of 93 million mt.


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