Economic recovery: Moody’s upgrades Tata Steel outlook to stable

02 Apr 2021 CW Team

The global rating agency affirmed the company's Ba2 corporate family rating (CFR). According to the agency, Tata Steel will sustain the improvement over 12-18 months, enabling its consolidated financial metrics to recover to levels more appropriate for its Ba2 CFR.

India's (Baa3 negative) steel consumption declined by 55% during the first quarter of fiscal 2021 (Q1 FY21) after a nationwide lockdown to contain Covid-19. After the economy opened in June 2020, pent-up demand from end-user industries like automotive, white goods manufacturing, construction and infrastructure have boosted steel consumption.

This has contained the annual steel consumption declined to only about 11%. Moody's estimates shipments for Tata Steel Indian operations (TSI) during fiscal 2021 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.

These conditions have propelled TSI's record profitability in recent quarters. TSI's profitability has steadily improved to its 10-year high of Rs 18,948 EBITDA per ton during Q3, from Rs 4,969 in Q1 fiscal 2021.

Moody's forecasts a long-term sustainable EBITDA per ton of Rs 13,200 for fiscal year 2022 for TSI, constituting a 30% gap compared with Q3. The company, therefore, has a substantial buffer especially given the benign operating environment. Moreover, the company's backward linkages with entire iron ore needs met from captive sources provide resilience to profitability even if steel prices were to fall severely.

In contrast, Moody's estimates shipments at Tata Steel's European operations (TSE) will decline by about 10% during FY21 and for profitability to gradually recover.

Europe's economic activity was affected by further lockdowns and a seasonally weak winter quarter, although it has improved since the pandemic's early months.

Image Source

Also read: Tata Steel Q3 operating profits highest ever

A strong recovery in Tata Steel's operations in the third quarter (Q3) of the fiscal year ending March 2021 has changed the outlook of global rating agency Moody's Investors Service on the steel major from negative to stable. The global rating agency affirmed the company's Ba2 corporate family rating (CFR). According to the agency, Tata Steel will sustain the improvement over 12-18 months, enabling its consolidated financial metrics to recover to levels more appropriate for its Ba2 CFR. India's (Baa3 negative) steel consumption declined by 55% during the first quarter of fiscal 2021 (Q1 FY21) after a nationwide lockdown to contain Covid-19. After the economy opened in June 2020, pent-up demand from end-user industries like automotive, white goods manufacturing, construction and infrastructure have boosted steel consumption. This has contained the annual steel consumption declined to only about 11%. Moody's estimates shipments for Tata Steel Indian operations (TSI) during fiscal 2021 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. These conditions have propelled TSI's record profitability in recent quarters. TSI's profitability has steadily improved to its 10-year high of Rs 18,948 EBITDA per ton during Q3, from Rs 4,969 in Q1 fiscal 2021. Moody's forecasts a long-term sustainable EBITDA per ton of Rs 13,200 for fiscal year 2022 for TSI, constituting a 30% gap compared with Q3. The company, therefore, has a substantial buffer especially given the benign operating environment. Moreover, the company's backward linkages with entire iron ore needs met from captive sources provide resilience to profitability even if steel prices were to fall severely. In contrast, Moody's estimates shipments at Tata Steel's European operations (TSE) will decline by about 10% during FY21 and for profitability to gradually recover. Europe's economic activity was affected by further lockdowns and a seasonally weak winter quarter, although it has improved since the pandemic's early months. Image Source Also read: Tata Steel Q3 operating profits highest ever

Infrastructure Urban

06 Jul 2026

ABS Marine Sees CRISIL Credit Rating Upgrade

ABS Marine Services has secured an upgrade to its long term and short term credit ratings from CRISIL, reflecting improved profitability and revenue growth through long term contracts. CRISIL moved the long term rating from BBB+/Stable to A-/Stable and revised the short term rating from A2 to A2+. The action signals strengthened financial metrics and operational resilience. The company benefited from durable client relationships with firms such as ONGC and Schlumberger. The rating decision followed stronger cash flows and an enlarged bank loan facility, which increased from Rs 3,705 million (m..

Infrastructure Transport

06 Jul 2026

Project BRAHMANK Marks 16 Years Of Strategic Roads In Arunachal

Project BRAHMANK is marking 16 years of work to establish strategic road and bridge links across Arunachal Pradesh, maintaining and developing 811 kilometres of roads and nearly 86 bridges that range from small culverts to large steel and arch bridges. These transport links are described as critical for ensuring year-round movement of defence personnel, equipment and essential supplies while improving everyday travel for people in remote villages. The project balances national security requirements with regional development by focusing on reliable access in challenging terrain. Notable enginee..

Infrastructure Transport

06 Jul 2026

Longleng CSOs Give One Week Ultimatum Over Two-Lane Highway

Civil society organisations (CSOs) in Longleng district have demanded immediate restoration of the deteriorating Changtongya–Longleng two-lane road and sought a detailed status report on the stalled construction within one week. The demand followed a consultative meeting convened under the Phom Peoples' Council (PPC) to discuss welfare and development concerns. PPC president YB Angam Phom said prolonged non-maintenance had caused hardship to commuters and affected transportation, local commerce and the district's development. The meeting urged authorities to undertake immediate restoration a..