Tata Steel Ltd 144A

Ladies and gentlemen, good day and welcome to the Tata Steel analyst call. Please note that this meeting is being recorded. All the attendees' audio and video has been disabled from the backend and will be enabled subsequently. I would now like to hand the conference over to Ms. Samita Shah. Thank you and over to you, ma'am.

Thank you, Kunchuk. Good afternoon, everybody, and to all our viewers joining us today. Welcome to this call to discuss our results for the fourth quarter and the year ending March 31st, 2023. I am joined by our CEO and MD, Mr. T.V. Narendran, and our ED and CFO, Mr. Kaushik Chatterjee. I will request them to make a few opening remarks before we open the call and take your questions. Before I hand it to them, I will remind you that the entire conversation today is governed by the Safe Harbor Clause, which is on page two of the presentation, which is uploaded on our website. Thank you, and over to you, Narendra.

Thanks, Amita. Good morning, good afternoon, good evening, depending on where you are. Just a few comments before I hand over to Kaushik. Global commodity prices staged a recovery during January, March quarter and continued, but continued to face an uncertain and volatile operating environment similar to the rest of the financial year. And while global inflation and rate hike dynamics have been at the forefront, there were fresh concerns about the banking sector in the past few months, which also weighed on the sentiment. Steel prices across key regions were up in March compared to December with Western markets inching up. I mean, in the U.S., it was over $1,000. Key steelmaking material, cooking coal, and iron ore prices continue to be volatile on supply dynamics and wavering expectations about Chinese demand. And overall, the spot spreads have witnessed an improvement in the fourth quarter on a quarter-on-quarter basis and above the FY23 average levels but remain below the levels that we witnessed in FY22. The economic activity in India continued to improve and apparent steel consumption was at 14% year-on-year for the fourth quarter and 13% for the financial year. And the year-on-year growth in the financial year is an indicator of prevalent domestic demand and was despite the imbalances created by the levy of export duty earlier in the year. For Tara Steel, FY23 has been a year of strategic progress as we continue to align our portfolio with the India growth story. India's crude steel production makes up two-thirds of the overall production for Tata Steel now and should further improve in the coming years. On an absolute basis, Tata Steel India achieved the highest ever crude steel production of 19.9 million tons and grew 4% year-on-year by de-bottlenecking across sites and ramping up the Nilachal Ispat asset. NNL is currently operating at a run rate of a million tons of crude steel plus pig iron on an annualized basis. India deliveries grew mostly in line with the production to surpass the previous best recorded in FY22 and domestic deliveries grew 11% year on year with record deliveries across segments. Moving to the quarter, our deliveries grew 9% quarter on quarter to 5.15 million tons and saw steady improvement across sectors, particularly auto and retail. Our net realizations improved by 1,700 rupees per ton and were better than the guidance of around 1,400 to 1,500 rupees per ton provided during the last earnings call. Sustainability is at the core of our strategy and Tata Steel is committed to net zero by 2045. Our route and pace of decarbonization across geographies will be calibrated for each location based on the local regulatory framework, government support, and willingness of customers to pay for the highest cost green steel. We continue to pursue multiple initiatives to reduce our emissions, including a recently initiated trial for injecting large quantity of hydrogen into one of our blast furnaces at Jamshedpur, Global First. In terms of growth, multiple projects are underway across India, and we are steadily progressing towards an aspiration of 40 million tons in India. We commissioned the coal rolling PLTC on the Pickelling Line in tandem coal mill, which is part of the 2.2 million coal rolling mill complex at Kalinga Nagar, and the full hard coal roll coils are now being produced. And this marks the beginning of an improvement in product mix. The continuous annealing line and the continuous galvanizing line will be progressively commissioned in the next year or so. And in longs, we are well-placed to more than double the presence by 530 by a multi-location growth and are also focused on product mix enrichment by expansion at our downstream operations. Moving to Europe, steel deliveries were at 2.1 million tons in the fourth quarter and around 8 million tons for the whole year. The drop in realizations and ongoing upgradation of the coal mill at Aymuddin have weighed on spreads despite moderation in costs. The coal mill upgrade is progressing, and the product mix should improve upon commissioning in the next few months. We have also commenced the relining of one of the blast furnaces in early April, which will be completed in the first half of this financial year. I'm also happy to share with you that Tata Steel has been recognized by the world's team as sustainability champions for the sixth time in a row, and by the World Economic Forum as a global diversity, equity, and inclusion lighthouse. Thank you, and over to you, Kaushik.