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Summary: Tata Steel Ltd.
Standard & Poors, May 2011
Standard and Poors RatingsXpress Credit Research provides in-depth coverage of international corporates, financial institutions, insurance companies, utilities, sovereigns and structured finance programs. RatingsXpress Credit Research lets users determine the credit rating of holdings and identify key factors underlying an issuer's creditworthiness, distinguishes the different risk exposures for new and existing deals, and provides an understanding of how their analysts interpret key regulatory, political and environmental events and their economic impact.
This product consists of a Summary Analysis: Bi-annual (at least). An abbreviated analysis containing Standard & Poor's issuer credit ratings as of the time the article was published. The analysis includes a rating rationale - the basis on which the rating was assigned - and an outlook section if the issuer is not on CreditWatch. Financial statistics are not included.
The rating on Tata Steel Ltd. reflects the weak business risk profile of the company's European operations, Tata Steel UK Holdings Ltd. (TSUKH; B+/Stable/B), and an aggressive consolidated financial risk profile. The company's highly integrated India business and good market position temper these weaknesses. Tata Steel's cost position is mixed, in our opinion. Its India operations have very low cost as the company has its own mines, which meet all its iron ore requirements and 50%-60% of coking coal needs. Nevertheless, we believe the European operations are exposed to volatility in raw material prices due to limited raw material security as well as a higher cost of production, particularly for the smaller U.K. plants. Tata Steel has undertaken cost-cutting and...
Companies mentioned in this report are: Tata Steel Ltd.
Tata Steel Ltd.