Lucror Analytics

Lucror Analytics is a leading credit and ESG research specialist and a provider of technology solutions for differentiated fixed income strategies. Our roots are in bottom-up fundamental credit analysis with a specialization in high yield corporate credits from Europe, Asia and Latin America. We are one of few research specialists integrating ESG considerations with fundamental credit research through a dedicated ESG platform. Our ESG assessment covers five key criteria: Disclosure, E,S, & G Pillars, Controversies, ESG Impact on Credit and ESG Momentum.

Recognizing the importance and value-add of Factor Investing in fixed income, Lucror developed the Smart Quant Navigator (SQN), an intuitive platform that helps clients devise and implement factor-based strategies ranging from pure quant to active fundamental, with integrated ESG.

Our company has been at the forefront of developments in the fixed income markets, identifying opportunities and consistently delivering new products and value-adding solutions to clients. Lucror has close relationships with the largest and most reputable asset managers, family offices, hedge funds, investment and wealth managers globally.

High Yield Experts

Senior Credit Analyst, Lucror Analytics

Trung Nguyen

Senior Credit Analyst

Credit

We view JSW Steel as “High Risk” on the LARA scale, as we believe the credit profile will worsen significantly in the next one year. The deterioration should be driven by a sharp drop in lower profitability, as well as large increases in debt to fund the aggressive expansion plan and acquisitions amid a challenging operating environment. That said, we note the Indian government’s continued willingness to support the domestic steel market, which will partly neutralise the cheap exports from steel-surplus countries China, Russia, South Korea and Japan. We like JSW's position in the Indian market as the largest player, and a low-cost domestic one at that. Its lack of captive iron ore and coal supplies exposes JSW to supply and price volatility. Our Credit Bias on JSW remains "Negative", on account of the acquisition risk associated with the group's partly debt-funded and aggressive expansion plan. This is against the backdrop of a highly challenging steel operating environment in India, due to the economic downturn.  We view JSW as “Weak” on the LAGA scale. The company has a well-structured Board of Directors, with INEDs holding six of the 12 positions. We like the INEDs, who constitute a diverse group and have been on the Board for varying periods, reducing the risk of complacency and interdependence. That said, the bond indenture is weak, providing limited protection for investors. Consequently, it appears that management’s interests may be skewed towards shareholders, rather than bondholders.

  We view JSW Steel as “High Risk” on the LARA scale, as we believe the credit profile will worsen significantly in the next one year. The deterioration should be driven by a sharp drop in lower profitability, as well as large increases in debt to fund the aggressive expansion plan and acquisitions amid a challenging operating environment. That said, we note the Indian government’s continued willingness to support the domestic steel market, which will partly neutralise the cheap exports from steel-surplus countries China, Russia, South Korea and Japan. We like JSW's position in the Indian market as the largest player, and a low-cost domestic one at that. Its lack of captive iron ore and coal supplies exposes JSW to supply and price volatility.   Our Credit Bias on JSW remains "Negative", on account of the acquisition risk associated with the group's partly debt-funded and aggressive expansion plan. This is against the backdrop of a highly challenging steel operating environment in India, due to the economic downturn.    We view JSW as “Weak” on the LAGA scale. The company has a well-structured Board of Directors, with INEDs holding six of the 12 positions. We like the INEDs, who constitute a diverse group and have been on the Board for varying periods, reducing the risk of complacency and interdependence. That said, the bond indenture is weak, providing limited protection for investors. Consequently, it appears that management’s interests may be skewed towards shareholders, rather than bondholders. 

JSW Steel - Tear Sheet - Lucror Analytics

JSW Steel Ltd

JSW Steel - Tear Sheet - Lucror Analytics