Moody’s Ratings has upgraded its outlook on JSW Steel Ltd and its US arm Periama Holdings LLC to positive from stable.
Expansion in operating scale, capacity additions, and disciplined financial management.
Production capacity grew ~20% in last 15 months to 35.7 mtpa, with another ~20% increase planned by FY28.
Recent additions of 6 mtpa crude steel capacity in India (FY25), further expansions of 2.2 mtpa (Vijayanagar, Salem), 5 mtpa (Dolvi), and 0.5 mtpa (BPSL) by FY28.
India’s steel demand expected to grow 5–7% CAGR till 2030, driven by infra and industrial expansion.
Moody’s projects earnings growth of ~₹300 bn in FY26, ~₹350 bn in FY27 (vs ₹223 bn in FY25), supported by sales volumes rising to 32 mt by FY27.
Moody's Upgrades Outlook on JSW Steel to Positive from Stable
The change in outlook reflects JSW Steel's meaningful expansion in operating scale, reinforcing its position as India's largest steel producer, Hui Ting Sim
JSW Group
Summary
Advertisement
Moody's Ratings upgraded its outlook on domestic steel major JSW Steel and its US-based arm Periama Holdings LLC to positive from stable.
The change in outlook reflects JSW Steel's meaningful expansion in operating scale, reinforcing its position as India's largest steel producer, Hui Ting Sim, a Moody's Ratings Assistant Vice President and Analyst said in a report on Wednesday.
Hui Ting Sim said the ramp-up of operations at recently completed projects will drive higher earnings and support sustained improvement in the company's credit metrics.
The rating action also reflects our expectation that JSW Steel will implement its growth plans with financial discipline, and it will proactively manage the refinancing of significant debt obligations, the analyst said.
"Moody's Ratings (Moody's) has changed the outlook on JSW Steel Limited (JSW Steel) and Periama Holdings LLC's (Periama Holdings) ratings to positive from stable," the report said.
Advertisement
On the rationale behind the move, Moody's said JSW Steel's production capacity grew by around 20% over the past fifteen months to reach 35.7 million tonnes per annum (mtpa), with plans for a further increase of about 20% by 2028.
In FY25, the company commissioned 6 mtpa of crude steel capacity in India. It also intends to add 2.2 mtpa at Vijayanagar and Salem through debottlenecking projects in the next 12 months, and an additional 5 mtpa at Dolvi and 0.5 mtpa at Bhushan Power and Steel Limited (BPSL) by FY28.
The substantial increase in JSW Steel's production capacity supports its ability to meet India's growing steel demand. India is the world's second-largest steel market, with steel consumption rising over 10% annually for the past four years.
"We anticipate that steel demand in India will grow at a 5-7% compound annual growth rate until 2030, fuelled by infrastructure spending, construction projects, and expansion in industrial production to meet the needs of a rising population," the report said.
Advertisement
Moody's said it expects higher sales volumes and profit margins to boost JSW Steel's earnings to about 4300 billion in fiscal 2025-26 and ₹350 billion in fiscal 2026-27, from ₹223 billion in fiscal 2024-25.
Following the commissioning of brownfield facilities over the last twelve months, the company estimates that its steel sales will climb to 28.5 million tonnes (mt) and close to 32 mt in fiscal 2025-26 and fiscal 2026-27, respectively, from 26.5 mt in fiscal 2024-25.
The earnings forecasts assume that JSW Steel's EBITDA per tonne will be around ₹10,500-10,750, which is in line with its 10-year average.
Show comments