Moody’s affirms JSW’s credit rating, changes outlook to positive

Tuesday, 14 September 2021 15:12:21 (GMT+3)   |   Istanbul

International credit rating agency Moody’s has affirmed Indian steelmaker JSW Steel Limited’s Ba2 corporate family credit rating, while its outlook for the company has changed to positive from stable.

According to Moody’s, the change in outlook reflects JSW’s better-than-expected operating performance this fiscal year. Moody’s forecasts that the company will continue to generate large and positive free cash flow from operations over the next 12-18 months amid supportive steel prices and steady product spreads due to likely continued strong steel demand.

Moody’s stated that steel consumption in India should grow at high-single-digit percentages in the fiscal year ending March 2022. While slowing construction during the monsoon season will keep steel consumption low in the second quarter, demand should pick up in the second half of the fiscal year 2022.

In Moody’s view, India’s rising steel demand, JSW’s broad offering of long and flat steel products and the commissioning of downstream facilities that produce high value-added products with better pricing, will help the company strengthen its market share. In addition, the company will increase its steel production following the commissioning of its annual five million mt capacity at its Dolvi plant in September this year. Moody’s stated that an increase in the company’s production should boost steel shipments by at least 20 percent to 19 million mt during the fiscal year 2022, and to 21.8 million mt in the next fiscal year.

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