Moody's Investors Service revises Tata Steel UK's outlook to negative
Moody’s Investors Service has given a negative outlook for Corus group. Corus is a UK subsidiary of India's largest steel producer, TATA Steel Limited. It has concluded that the demand of products of the company is decreasing significantly in Europe and the UK, and can further decrease in the coming months. This has resulted in decline in steel prices and reduced production volumes following world financial crisis.
Moody's AVP Analyst and lead analyst for Tata Steel, Ivan Palacios said that EBIT margin is not good for TATA steel and it fell by 8 percent. TATA has already decided to reduce crude steel production. The company has recently annouced 5 percent decrease in annual production volume and loss of many jobs.
Technical Analyst with Angel Broking, Pawan Burde said that the borrowing of company is unlikely to affect as TATA has already arranged funds to deal with any situation.
Tata Steel Group, chief financial officer, Koushik Chatterjee said that the rating is negative as it is affected by global increase in steel products and volumes.
The stock of company fell 14.1% and closed at Rs 238.85 at BSE after Moody's revision.