Tata Steel Ltd 144A

Ladies and gentlemen, welcome to the Tata Steel analyst call. The meeting will begin shortly. We thank you for your patience. Thank you, everyone. 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.

Good afternoon, good afternoon everybody and welcome to this call to discuss our results for the third quarter of FI24. We have with us Mr. T.V. Narendran, CEO and Managing Director Tata's team and Mr. Kaushik Chatterjee, Executive Director and CFO Tata's team. I hope you had a chance to go through our results which were published yesterday as well as the presentation which is on our website. As usual, the entire discussion today will be covered by the Safe Harbor Clause, which is on page two of the presentation. We will make a few opening comments before opening the floor for questions, both audio as well as chat. With that, I will hand it over to Naren. Thank you.

Thanks, Kamita. Good morning, good afternoon to all of you. I'm going to make a few comments and then pass on to Kaushik for his comments, and then we'll open it up for the questions. During the quarter, the steel prices were mixed across key regions, driven by different factors. So in the US and EU, the tightness in the steel supply and elevated raw material prices led to a rebound in steel spot prices towards the end of the quarter, while in Asia, sustained weakness in the Chinese domestic demand has led to elevated exports weighing on the prices in general. In India, the steel prices had held up given the strong domestic demand until October twenty three, but steady exports from China had driven the build up in the traders inventory. And this has resulted in a four to five percent drop in steel prices in November, December. Despite this context, Tata Steel has improved on its margins in the third quarter, aided by higher deliveries as well as net realizations in India. Moving on to our performance, our India crude steel production was around five point three million tons. driven by close to 100% capacity utilization on an overall basis and production increased by 6% quarter on quarter and year on year basis. India deliveries were close to 4.9 million tons and were up quarter on quarter as well as year on year. And this has been driven by a rise in domestic deliveries by about 10% year on year, which is broadly in line with the increase in the apparent steel demand in India. Among the segments, automotive segment had the best ever third quarter sales and was up 8% quarter-on-quarter and 22% year-on-year. This was despite a 4% QR quarter-on-quarter drop in vehicle production. Our efforts to enrich the product mix has led to an increase in high-end sales to the automotive customers. Our retail sales continue to be driven by well-established brands such as Tata Tiscon, Tata Stelium and Tata Astral. And during the quarter, Tata Tiscon volumes grew by 10% quarter-on-quarter and 18% year-on-year. And this has been enabled by increased reach and initiatives to enhance customer consumer experience. We continue to deliver various grades of steel to key projects across India, including the recently inaugurated Atal Setu in Mumbai, India's longest sea bridge where we supplied over 42,600 tons of Tata Tiscon rebars, as well as Tata Tiscon, I mean Tiscon ready built solutions and structural plates. In Netherlands, our steel deliveries were around 1.3 million tons in the quarter, up 5% quarter on quarter basis. Revenue per ton was down between 50 and 60 pounds per ton on a quarter on quarter basis. And the demand dynamics and the realign of one of our blast furnaces obviously had an impact on the realizations and our performance there. In UK, the steel deliveries were around 0.64 million tons and were lower on quarter on quarter basis in part due to the operational issues relating to the stuff given the aging assets. Moving to strategic initiatives, we remain committed to responsible growth and are focused on sustainable value creation. We are focused on an agile business model and our strategy is calibrated to the operating geography. So in India, we are scaling up our steelmaking capacity to capitalize on the growth opportunity. We will commence the phase commissioning of our 5 million tonne per annum capacity expansion at Kalinga Nagar. We have charged power into the new blast furnace and expect to make it physically ready by next quarter and start production soon thereafter. We target to produce about 0.7 million tons of crude steel in FY25 in addition and ramp up further in FY26. And as part of a multi-pronged approach to progress on sustainability journey, we have undertaken pilot projects to achieve carbon avoidance in the blast furnaces by injecting biochar, hydrogen or steel scrap and are waiting with technology partners on process improvements. It gives me immense pleasure to share that now we have three sites which have received the responsible steel certification. Jamshedpur was the first site in India to achieve the certification. And now both Miramontli and Kalinganagar have also achieved the same. In the UK, we will come in statutory consultations with the relevant stakeholders on the proposed restructuring as we transition to EFB steelmaking, which will save 50 million tons of CO2 emissions over a decade. It's a difficult situation for our employees. We fully empathize with that. And it is for this reason that we've tried very hard for the last 15 years to support this business. But I think we have reached a stage where continuing as we did is no longer an option. And we would be closing the first blast furnace by the middle of 2024 and the second last one is the second half of 2024. Thank you and over to Kaushik.