Moody’s revises Tata Steel’s outlook to stable from negative

Wednesday, 31 March 2021 15:16:01 (GMT+3)   |   Kolkata

Moody’s has revised the outlook of Indian steelmaker Tata Steel Limited from negative to stable on back of the company’s solid recovery in operations in the third quarter of 2020-21, the credit rating agency said in a report on Wednesday, March 31.

"The rating action also reflects the company's proactive financial management amid the pandemic. It has publicly stated the target of reducing gross debt by at least $1 billion each year and prioritising deleveraging over capital expenditure,” Kaustubh Chaubal, vice president and senior credit officer at Moody's, said.

Moody's estimates shipments from Tata Steel’s Indian operations during the fiscal year 2020-21 will stay largely flat. A benign industry environment, supportive government policies in the form of large infrastructure investments, and markedly better prospects in the automotive industry have supported steel prices in India, the rating agency’s report said.

In contrast, Moody's estimates shipments at Tata Steel's European operations will decline by about 10 percent during the fiscal year 2020-21 and for profitability to recover gradually. Europe's economic activity was affected by further lockdowns and a seasonally weak winter quarter, although it has improved since the early months of the pandemic.

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