India, Oct. 8 -- The state-owned integrated steel producer has won a show of confidence from its rating agency just as it lines up an expansion that would add nearly 70 percent to its capacity. How lenders and investors read the company may shift as a result, though the agency has attached firm conditions on profit per tonne and leverage. Underneath the headline sit climbing earnings, falling debt, a weaker first-quarter sales figure and a coking coal mine that has yet to begin production.

Shares of Steel Authority of India Ltd are trading at Rs. 169.05, down 3.02 percent on Thursday. The stock touched the intraday high of Rs. 175.65 after opening at Rs. 175.65 before slipping to a low of Rs. 167.51. The company commands a market capital...