InvestorQ : Why has Tata Steel outlook been upgraded by CARE?
Lavanya Subramanian made post

Why has Tata Steel outlook been upgraded by CARE?

Anamika Sodhani answered.
1 year ago

The rally in the stock of Tata Steel appears to continue as the stock recently scaled another 4.5% on Friday. The trigger for this rally was CARE Rating upgraded its long-term credit rating outlook from Negative to Stable. This adds fervour to the stock, which is already trading at a 52-week high level of Rs.1,247 per share. This upgrade also takes away the short term concerns that analysts had over its margins and its European business.

Some of the factors that were instrumental in this upgrade were improved performance in the third and fourth quarter of FY21, revival in steel demand, elevated levels of steel prices, massive net cash generated from operations and substantial deleveraging. This deleveraging has, in fact, improved debt coverage ratios drastically. Now, the good news is that, even the loss making European operations is expected to turn around to operating profits.