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Informist, Friday, Oct. 3, 2025

 

--Moody's changes JSW Steel rating outlook to 'positive' from 'stable' 

--Moody's affirms JSW Steel's 'Ba1' senior unsecured rating 

 

MUMBAI – Moody's Ratings has changed the rating outlook on JSW Steel Ltd. to 'positive' from 'stable' and affirmed the 'Ba1' senior unsecured rating and 'Ba1' corporate family rating. "The outlook change to positive reflects JSW Steel's meaningful expansion in operating scale...," Hui Ting Sim, assistant vice president and analyst at Moody's Ratings, was quoted as saying in a press release dated Wednesday.

 

"The ramp-up of operations at recently completed projects will drive higher earnings, and support sustained improvement in the company's credit metrics," he added. The rating action is also on expectations of JSW Steel implementing its growth plans with financial discipline and proactively managing the refinancing of debt obligations, he said.

 

Moody's said it will upgrade JSW Steel's ratings if the company successfully increases its earnings while keeping debt levels largely stable. An upgrade will also be on the cards if there is a sustained improvement in JSW Steel's credit metrics and if the company demonstrates liquidity management by refinancing lumpy debt obligations well before they fall due, and continues to execute its growth plans. However, the outlook will return to 'stable' if JSW Steel's credit metrics fail to improve because of operating underperformance or weak market conditions, which would lead to poor profitability and cash flow generation, it said.

 

JSW Steel plans to increase its production capacity by about 20% in 2028, the rating agency said, adding that the capacity had grown 20% over the past 15 months and reached 35.7 million tonnes per annum. The company also intends to add 2.2 million tonnes per annum at Vijayanagar and Salem by expediting projects in the next 12 months. In 2024–25 (Apr-Mar), the company commissioned 6 million tonnes per annum of crude steel in India. In addition to Salem and Vijayanagar, it will add 5 million tonnes per annum at Dolvi and 0.5 million tonnes per annum at Bhushan Power and Steel Ltd. by FY28.

 

Moody's sees steel demand in India to grow at compound annual growth rate of 5-7% by 2030, driven by infrastructure spending, construction projects, and expansion in industrial production. Having commissioned the brownfield facilities over the last 12 months, the company's steel sales are expected to rise to 28.5 million tonnes in FY26 and close to 32 million tonnes in FY27, the rating agency said. 

 

Moody's sees JSW Steel's earnings before interest, tax, depreciation, and amortisation per tonne at INR 10,500-INR 10,750, which is in line with its 10-year average. Lower raw material costs, reduced import competition in India and the US, and cost efficiencies are expected to support margin improvement for JSW Steel in the coming two years.

 

The rating agency expects the company's debt to increase moderately given its sizeable capital spending plan, but stay close to INR 1 trillion. JSW Steel has budgeted capital expenditure of INR 200 billion in FY26 and INR 210 billion in FY27.

JSW Steel reported a consolidated net profit of INR 21.84 billion for the June quarter, on a revenue of INR 431.47 billion. At 1121 IST, shares of the company were up 1.2% at INR 1,160 on the National Stock Exchange.  End

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Reported by Gopika Balasubramanium

Edited by Ashish Shirke

 

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