Tata Steel (TSL) said that India Ratings and Research has upgraded the company's long-term issuer rating to 'IND AA+' from 'IND AA' with 'Stable' outlook.
India Ratings said that the upgrade reflects its expectation that, despite likely aggregate capex of about Rs 220 billion, TSL's consolidated adjusted net leverage (adjusted debt net of cash/EBITDAR) would improve and hover between 1.0x-2.0x in FY22 and FY23 (FY21: 2.7x; FY20: 6.0x), as significant cash flow generation would lead to a reduction in its consolidated gross debt.
The ratings agency said that reducing exposure to loss-making overseas units, sustained positive free cash flows at European operations, leading to lower refinancing requirements at overseas group entities, and the consolidated adjusted net leverage falling below 2.0x, on a sustained basis, may lead to a positive rating action.
However, sustained weak profitability of the European operations, substantial debt-led acquisitions and or higher-than-expected capex outflows, leading to the consolidated adjusted net leverage exceeding 3.0x, on a sustained basis, would lead to a negative rating action.
Tata Steel group is among the top global steel companies with an annual crude steel capacity of 33 million tonnes per annum.
The company recorded a consolidated net profit of Rs 12,548 crore in Q2 FY22 as against a net profit of Rs 9,768 crore in Q1 FY22, registering a growth of 28.5% on QoQ basis. Total revenue from operations rose by 12.9% QoQ to Rs 60,283 crore during the quarter. The steel maker's net profit and revenue have risen by 7.5 times and 54.8%, respectively, in Q2 FY22 as compared with Q2 FY21.
The scrip rose 0.21% to currently trade at Rs 1156.30 on the BSE.
Powered by Capital Market - Live News
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)
Dear Reader,
Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.
As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.
Support quality journalism and subscribe to Business Standard.
Digital Editor
RECOMMENDED FOR YOU