Care upgrades JSL's credit facilities rating to BBB with stable outlook
Aug 29, 2020
New Delhi [India], Aug 29 : Care Ratings has upgraded the rating of Jindal Stainless Ltd's (JSL's) credit facilities to BBB from BBB-minus with a stable outlook.
Given JSL's strong financial and operational profile, Care said the improved rating reflects a resilient business strategy despite interruptions caused due to pandemic over the past few months.
It factored in steady growth in the company's sales and stable operating performance over a period of FY18 to FY20. Care has upheld its leadership position in the domestic stainless steel market.
The revision in ratings also takes into consideration the company's successful exit from corporate debt restructuring (CDR) effective March 2019 which is likely to provide it better operational and financial flexibility.
These rating strengths are, however, tempered by the leveraged albeit improving capital structure, susceptibility of its realisations and margins to volatility in raw material prices as well as cheap imports, foreign exchange rates and cyclicality inherent in the stainless steel industry.
"I am confident that measures proposed by the government to curb arbitrary and irrational imports that cause wanton injury to Indian manufacturing will provide a much-needed support to the stainless steel sector," said Managing Director Abhyuday Jindal.
