Tata Steel‘s share price continued to trail in the red for the third straight session on Thursday morning.

What Happened: Moody’s affirmed Tata Steel’s “Baa3” issuer rating and maintained a “stable” outlook on the stock.

The global rating agency expects Tata Steel’s earnings to see structural improvement over the next two years, driven by the upcoming commissioning of its brownfield expansion at Kalinganagar in India, scheduled for later this year, which is anticipated to boost sales volume.

The closure of its loss-making upstream assets in the United Kingdom, where one blast furnace was shut down in July and the second is planned for closure in September, will enhance profitability, the ratings agency expects. The company’s consolidated EBITDA is projected to rise to about ₹29,000 crore in the fiscal year 2024-25 and further to ₹38,000 crore in 2025-26, up from ₹24,100 crore in 2023-24.

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“The rating affirmation and stable outlook reflect our expectation that the structural improvement in Tata Steel’s earnings over the next two years will mitigate the risks associated with new state taxes on mining activities in India and developments at its operations in Europe, amid challenges in the broader steel sector,” said Hui Ting Sim, a Moody’s Ratings Assistant Vice President and Analyst.

The Tata Group company on Wednesday evening also announced that it has acquired an additional stake in its Singapore-based subsidiary, T Steel Holdings, for $280 million (₹2,347.81 crore), purchasing 178.3 crore shares at a face value of $0.157 each.

This purchase follows a previous acquisition where Tata Steel bought 115.92 crore shares for $182 million (₹1,528.24 crore), also priced at $0.157 per share. This strategic investment aims to bolster Tata Steel’s international footprint and enhance operational efficiency.

Price Action: Tata Steel’s share price was down 0.61% to trade at ₹152.75 as the markets opened on Thursday.

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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.