International credit rating agency Moody's has announced that it has changed the outlook of Indian steelmaker JSW Steel to negative from ratings under review and affirmed its Ba2 ratings.
Moody’s expects the company’s credit profile to be negatively affected by the challenges brought by coronavirus pandemic.
The credit rating agency stated that rating affirmation of JSW Steel reflects Moody’s expectation that the company will be able to restore its financial metrics to the levels commensurate with the Ba2 rating by the fiscal year ending March 2023, while the negative outlook reflects its expectation that the company’s credit profile will remain weak for a prolonged period due to the challenges caused by the coronavirus pandemic, with no meaningful recovery anticipated at least over the next 18-24 months.
Moody’s believes that the economic conditions in the major markets which the company is active in, will possibly be tough in the long term and that there are significant downside risks due to coronavirus pandemic and this situation could cause a delay in the company's recovery.
Besides, the company's EBIT margin is expected to decrease to single digits for the first time in 14 years, due to lower demand caused by the pandemic.