Fitch Revises Outlook On JSW Steel To Stable From Negative
Fitch Ratings-Singapore/Mumbai: Fitch Ratings has revised the Outlook on JSW Steel Limited's (JSWS) Long-Term Issuer Default Rating (IDR) to Stable from negative and affirmed the rating at 'BB'. The agency has also affirmed JSWS's senior unsecured rating and the rating on its senior unsecured notes at 'BB'.
The outlook revision reflects our view that robust profitability from improved industry fundamentals and a measured approach to capacity expansion will enable JSWS to deleverage steadily over the next few years. We estimate that the company's leverage will remain relatively high, with funds from operations (FFO) adjusted gross leverage at over 4.0x over the next two years, but risks are partly offset by JSWS's healthy EBITDAR margin, which should stay at over 20% to be well above the median for 'BB' rated steel companies. JSWS benefits from efficient operations that cater to structural demand growth in India amid the industry's better demand-supply balance following Chinese capacity cuts.