Jindal Stainless Limited<\/a> (JSL) to \u2018CARE BBB\u2019 with a stable outlook. The previously assigned rating by CARE was that of \u2018CARE BBB-\u2018. Given JSL\u2019s strong financial and operational profile, the improved rating reflects a resilient business strategy despite interruptions caused due to pandemic over past few months.<\/p>\nCARE Ratings factors in the steady growth in the Company\u2019s sales and stable operating performance over a period of FY18 to FY20. CARE Ratings has upheld the Company\u2019s leadership position in the domestic stainless steel market. This is a testimony to the increased financial flexibility of JSL after its CDR exit and its consistent efforts for debt reduction.<\/p>\n
Managing Director, JSL, Abhyuday Jindal said, \u201cThis improved rating is continued validation of JSL\u2019s performance. CARE Ratings take into account strong operating metrics and competitive strengths of JSL in the stainless steel market. It underscores the consistently improving performance in asset turnover, healthy per-tonne operating profits, and reduced debt levels. I am confident that the measures proposed by the government, to curb arbitrary and irrational imports that causes wanton injury to Indian manufacturing, will provide a much needed support to the stainless steel sector.\u201d<\/p>\n
CARE Ratings reports JSL\u2019s key rating drivers as, \u201csteady growth in the company\u2019s sales volumes and stable operating performance through the period FY18 to FY20 (FY refers to the period from April 1 to March 31), characterised by improving asset turnover and healthy per-tonne operating profits, which coupled with an improvement in gearing owing to reduction in debt levels, resulted in healthy cash accruals. The revision in the ratings also takes into consideration the company\u2019s successful exit from corporate debt restructuring (CDR) effective March 2019 which is likely to provide it better operational and financial flexibility. The ratings continue to derive strength from the extensive experience of the promoters and the management having a considerable track record in the stainless steel industry. 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 and foreign exchange rates and cyclicality inherent in the stainless steel industry\u201d.<\/p>\n<\/div>\n
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