ICRA Revised Steel Sector Output to ‘Positive’
Steel News | 2021-09-03 12:52:28
Following outbreak of Covid-19 pandemic last year, the agency had downgraded the sector outlook to ‘negative’, predicting nearly 20% dip in annual steel demand during the year ended March 2021.
By Paul Ploumis
SEATTLE (Scrap Monster): The leading ratings agency ICRA revised the outlook on domestic steel sector in India from ‘stable’ to ‘positive’. This is on the back of all major listed steel companies in the country posting strong financial performance in the most recent quarter.
Following outbreak of Covid-19 pandemic last year, the agency had downgraded the sector outlook to ‘negative’, predicting nearly 20% dip in annual steel demand during the year ended March 2021. However, it upgraded the outlook to ‘stable’, citing improving demand and prices. The agency foresees 12% surge in domestic steel consumption during the current fiscal.
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ICRA noted that all major listed steel companies posted their best-ever quarterly performance in Q1 of FY22. The domestic steel companies are significantly less leveraged. Also, the earnings outlook continues to look healthy for the remaining months of the financial year, it said.
The consolidated debt levels have registered tremendous decline by over 20% from INR 2.6 lakh crore in end-July last year to INR 2 lakh crore in end-July 2021. Also, the industry’s consolidated borrowing per metric tonne of installed capacity has declined by almost half from $350 per tonne in 2008 to $180 per tonne in July this year.
