Steel sector outlook revised to positive on continued earnings uptick: Icra

Icra Ratings has revised the steel sector’s outlook to positive from stable following all large listed steel companies reporting their best ever quarterly performance in Q1FY22, and the earnings outlook remaining healthy for the remaining months of the fiscal.

Given the strong earnings growth and capex curtailments following the pandemic related uncertainty, steelmakers started to aggressively deleverage since the second quarter of FY2021.

This trend is reflected by the industry’s consolidated debt levels declining to Rs 2.0 trillion in end-July 2021, from Rs 2.6 trillion in end-July 2020, registering a sharp decline of over 21 percent in a short span of a