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Moody's Upgrades Tata Steel's Long Term Rating To Baa3 On Solid Credit Profile, Indian Steel Operations
Moody's Investors Services has upgraded Tata Group-backed leading steelmaker, Tata Steel's ratings to investment grade with a Baa3 issuer rating. Also, the rating agency has assigned the company's outlook to 'Stable' from positive. Further, it withdrew the company's Ba1 corporate family rating. The upgrade is on the back of continued strength in the credit profile of Tata Steel along with its solid market position in India. Also, the 1.25 billion pound deal with the United Kingdom is seen as a positive development for the company.
Kaustubh Chaubal, a Moody's Senior Vice President said, "The upgrade reflects our expectation of the continued strength in Tata Steel's credit profile due to the company's solid market position in India. We expect the company's profitability to increase even as softer steel prices dent revenues."
The sustained improvement in its European operations especially following the expected closure of the loss-making upstream operations in the United Kingdom (Aa3 negative); and additionally, the company's close association with its parent, Tata Sons are key positives.
The company's strong presence in the world's second-largest steel market, India, will be a key driver of the company's credit profile.
India is expected to witness a rise in steel consumption at a 7% cumulative annual growth rate until 2030, fueled by continuous, large infrastructure investments as well as increasing demand from the auto sector.
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- [Editor:邢亚敏]
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