Tata Steel to Deliver Enhanced Credit Metrics in FY25

SEATTLE (Scrap Monster): Leading ratings firm CreditSights, in a report published yesterday, noted that it expects steel maker Tata Steel to post improved credit metrics during the ongoing fiscal year. The Fitch Solutions company expects significant improvement in net leverage, driven by robust EBITDA growth and declining capital expenditure.

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The projected improvement will be mainly on account of robust domestic demand for the metal led by infrastructure sector coupled with lower coking coal prices. It must be noted that Tata Steel had reported nearly 65% dip in consolidated net profit for the March 2024 quarter, primarily driven by lower realizations and exceptional expenses. The revenues posted a decline by 6%. Also, EBITDA was down significantly by 27%, weighed down by ongoing losses from European operations.

CreditSights expects Tata Steel’s FY25 EBITDA to record robust year-on-year growth in the mid 20 percent range, aided by robust domestic steel demand and anticipated recovery in steel price realizations. Also, lower coking coal input costs are expected to offset higher iron ore input costs, it noted.

Commenting on the company’s annual results, CreditSights said that it were less poor than feared.