Credit measures that Moody's would look for include maintaining RCF/Debt ratio above 25%-30% and EBIT/Interest above 8.0x on a consistent basis.
On the other hand, the rating would experience downward pressure if Reliance a) undertakes aggressive debt-funded capital investments or acquisition plans, b) returns cash to shareholders beyond its dividend payout policy of 20-25%, and c) its profitability deteriorates due weakening operating environment, such that RCF/debt drops below 20% and EBIT/interest coverage falls below 4x on a consistent basis.
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