While upgrading the company, S&P says it expects capex of about ₹110 billion annually, up from about ₹70 billion in fiscal 2021.
“In our base case, we forecast the company’s EBITDA and free operating cash flow of about ₹1 trillion and ₹350 billion–₹400 billion, respectively, over fiscals 2022 and 2023. This is despite our assumption of a 10 percent decline in steel prices in fiscal 2023 from the current level,” S&P said during the recent rating upgrade.
On August 3, S&P Global Ratings raised its long-term issuer credit rating on Tata Steel to ‘BB’ from ‘BB-’.
Accelerated deleveraging
Deleveraging should improve resilience of Tata Steel’s credit metrics through the steel price cycle, the agency said.
The global rating agency expects Tata Steel Ltd’s debt levels to decline materially over the next two years on the company’s commitment to deleverage, supported by strong operating cash flows.
This story is from the August 2021 edition of Steel Insights.
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This story is from the August 2021 edition of Steel Insights.
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