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Debt-to-earnings ratio of steel makers to remain below 2 times: Crisil
Research firm Crisil Ratings on Monday said it expects the net debt-to-EBITDA ratio of domestic steel manufacturers to stay below the level of 2 times in the financial year 2023-24.
The steel makers had reported the ratio of net debt to EBITDA in the range of 1.6-1.7 times in preceding financial year (FY) 2022-23, Crisil Ratings said in a report.
"Domestic primary steel manufacturers are likely to see their leverage, in terms of net debt to earnings before interest, tax, depreciation and amortisation (Ebitda) ratio, remain below 2.0 times this fiscal (compared to an estimated 1.6-1.7 times in fiscal 2023) despite undertaking capital expenditure to cater to growing demand," it said.
With the leverage much lower than the average of 3.5 times, seen during past five fiscals, the median credit quality of the sector is unlikely to be affected as balance sheets of the players will remain healthy. Further, project risks are expected to be low due to the brownfield nature of bulk of the ...