Tata Steel Ltd 144A

Ladies and gentlemen, good day and welcome to the Catastyle Analyst Call. Please note that this meeting is being recorded. All the attendees' audio and video has been disabled from the back end 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, everyone, on this Saturday afternoon. And welcome to our call to discuss our results for the fourth quarter and the full year financial year FY26. We have with us Mr. Narendran, our CEO and Managing Director, and Mr. Chatterjee, our Executive Director and CFO. They will make a few opening comments, and then we will take any questions you may have. As always, the discussion will be covered by the Safe Harbor Clause on the first page of our presentation. I hope you had a chance to go to the presentation. It was uploaded on our website yesterday. So with that, I will request Narendran to make a few opening comments. Thank you.

Thanks, Samita, and hello, everyone. A few comments before I hand over to Kaushik. Tata Steel delivered a strong performance in FY26 with improved margins, expanding across operating geographies despite subdued pricing and challenges during the year. The performance is a cumulative impact of multiple decisions and disciplined execution over the last few years and positions as well for the next phase of growth and value creation. India for us is a key anchor of our growth strategy, with annual crude steel production and deliveries increasing 8% year-on-year to around 23 million tonnes, and the successful ramp-up of the 5 million tonnes per annum expansion at Kalinga Nagar, alongside the commissioning of the downstream facilities, reflects a value-led growth strategy for India. This is supported by a strong marketing network and deep customer engagement, and we maximise deliveries to chosen segments, and some segmental highlights are as follows. The automotive and special products business delivered best of a quarterly and annual volumes, continues a kneeling and galvanizing line at Kalinga Nagar, which is a state-of-the-art facility, secured over 25 new-grade approvals across ultra-high-strength steels and coated products, enabling customers to meet evolving safety and light-weighting requirements. FI26 also marked a shift in our approach to customer relationship from engagement-led initiatives to solution-oriented partnerships, anchored in innovation and AI-led enablement. As a result, our branded and retail segment continued to scale. And Tata Tiscona retail brand achieved the best of annual volumes, while Tata Stelium, our cold roll brand, achieved robust growth in the volumes with a 28% year-on-year growth. Innovation continues to differentiate our construction solutions and help cater to complex project requirements. We deployed the InQuik modular bridge system at the Varanasi Ranchi Kolkata Espresso in just 24 days. and introduced a first-of-its-kind mobile board pile cage solution in significantly enhancing on-site efficiency. In discerning segments, we strengthened our presence in shipbuilding and oil and gas, aided by international certifications that enable us to participate in higher specification and globally competitive orders with stringent quality and reliability requirements. Our downstream businesses, including tubes, wires, and colors, achieved the best of our sales, while Tinplate achieved record annual sales of the Paxil edible oil cans. We remain committed to our India growth agenda with continued investments across capacity, downstream integration and sustainable steelmaking. During the year, we commissioned a scrap-based 0.75 million ton electric arc furnace at Ludhiana and progress continues on the proposed expansion at Nilachal, which will support the next phase of value-accurative growth. In UK, annual delivery stood at 2.2 million tons, reflecting subdued demand dynamics. And we welcome the recently announced revisions to safeguard measures, including 60% reduction in tariff-free quotas and higher duties, which are expected to support a more balanced market environment. Continued and calibrated policy support will be critical to enable a sustained recovery in the market. In Netherlands, the liquid steel production was broadly stable at 6.7 million tonnes, while deliveries were 6.1 million tonnes. Policy measures, including tighter safeguards, effective from the 1st of July, and the ongoing implementation of CBAM are reshaping trade flows and enabling preference for local supply. Recently, our operations have been impacted by temporary suspension of the direct steel plant at Imhotep following emission observations. However, we have now resolved the issue and the plant is expected to restart soon with due regulatory clearance. Separately, we continue to deeply engage with the province and the environmental regulators on emissions compliance at our coke and gas production facilities and the future of these facilities. I must emphasize that the company has undertaken several measures in the last two years to enhance its environment standards in the coke and gas plants and given the age of these plants, we are now considering closure of these plants in the future. However, any decision on closure of these plants will have to be done in a safe, planned and controlled manner. Finally, the developments in West Asia have increased costs and supply chain risk around energy, freight and some raw materials. In the near term, improved pricing trends across India, Netherlands, and UK should help absorb these cost pressures. In India, upstream are largely operational, though there are some impact on our downstream galvanizing template and color-coded lines because of the shortage of some critical inputs like propane. We are actively trying to mitigate this, and most of the lines are now back in full operation. We continue to monitor the evolving situation closely with a close eye on the demand dynamics. With that, I will now hand over to Kaushik for his comments. Thank you.

Thank you very much. Good afternoon or good evening to all those who have joined in. In recent years, the global markets have been continuously being reshaped by repeated disruptions, including the pandemic, geopolitical tensions, supply chain dislocations, and evolving regulatory framework. Together, these factors have led to a very highly uncertain and volatile operating environment, especially for the long and complex industries like steel. In the quarter ended March 2026 and for the financial year 2526, Tata Steel has delivered a resilient and a consistent performance through a series of deliberate value accretive actions across our portfolio to navigate multi-year trough in steel prices while managing unprecedented levels of uncertainty. I will today talk on three areas, firstly on the performance management, secondly on balance sheet and thirdly on some recent developments in Netherlands and the UK. Firstly, on performance, the financial year 25-26 was challenging on one hand, but represents the continuation of a strategic journey and in many ways is a precursor to also what lies ahead. The focus is clearly on the quality of earnings. A consolidated EBITDA increased by 35% year-on-year from 25,802 in the full year ended March 25 to 34,848 crores in the full year ended March 26. The consolidated EBITDA margin expanded by 320 basis points from 12% to 15%. Our full year performance demonstrates the impact of the cost transformation program, which has achieved about Rs. 10,868 crores of savings across geographies. India delivered the cost transformation benefits of Rs. 3,927 crores, Key cost efficiencies were driven by purchase optimization of spares, reduced refractory consumption, increased use of coastal waterways, which offer a structural cost advantage over other modes of transport, higher power wheeling and leaner coal mix. UK achieved a cost benefit of about Rs. 1,958 crores, driven by calibrated and focused spending on maintenance costs and maintenance management, stronger spares management discipline and insourcing of product testing. Netherlands delivered benefits of about 4,983 crores via optimization of cold blend, leading to decline in procurement costs and deployed value in use concept to improve operating efficiencies such as oil rate, scrap consumption, etc. In terms of execution, the cost transformation program has achieved about 95% compliance to the stated plan of about 11,500 crores. The key variation to the 100% compliance was a delay in Darcy Netherlands restructuring, which has since been completed. In financial year 2027, we are aiming to achieve additional cost transformation savings of about 7,100 crores versus the FY26 level. We have also enhanced in the last financial year a working capital efficiency and released around 6,000 crores of cash during the year, especially in India and Netherlands, through very focused management of working capital. Let me now speak on the India business as it continues to be our core growth engine and our anchor in terms of the future strategy of Tajikistan. India now contributes about 74% of Tata Steel's total crude steel production. At a geographical level, India continues with its industrial leading performance with the EBITDA margin growing at about 17% year-on-year to 34,272 crores. The EBITDA margin was about 24% and similar to the 10-year average even in a challenging year. Our performance in the UK and Netherlands have also improved materially on a year-on-year basis. UK losses have now narrowed to about 168 million to negative 270 million, while Netherlands EBITDA almost tripled to 267 million. Combined, the UK and Netherlands EBITDA turned positive for the financial year 2025-2026. Secondly, our performance also demonstrates the cash flow orientation of the entire company. Operating cash flow before CapEx and dividend increased from 17,700 crores in the previous year to 29,254 crores in financial year 26 and free cash flows of 10,738 crores which was significantly higher compared to the previous year. Our capacity expansion in India in Phase 2 of Kalinga Nagar is now complete and this is being complemented by focused investment in downstream facilities and portfolio simplification, strengthening our product mix and enhancing our margin profile. We continue to focus on growing the India business, some of which we had discussed in our earlier calls. Moving to the fourth quarter performance provided on slide 28 of the presentation, our consolidated revenues stood at about 63,270 crores and EBITDA was 9,953 crores, translating to an EBITDA margin on a consolidated basis to 16%. Higher realizations and improved volumes in India were complemented by savings on account of cost transformation. Tata Steel's standalone revenues for the quarter At about Rs. 38,448 crores, an EBITDA was Rs. 9,439 crores. On a per ton basis, the EBITDA witnessed a sequential improvement of Rs. 2,100 per ton, primarily driven by the higher volumes and steel realizations. Our wholly owned subsidiary, Nilachal Ispat, recorded Rs. 402 crores of EBITDA, up 15% quarter-on-quarter, and reflecting an EBITDA margin of 27%. We have received the board approval to merge NINL with Tata Steel subject to necessary approvals and permissions and we are looking to complete the transaction in financial year 2027. Moving to UK, steel prices remain below £500 per tonne until the end of February. Since then, with the onset of the West Asia conflict, along with the UK government announcing, indicating, announcements indicating higher and tighter steel safeguard measures, have given a meaningful uplift in hot roll coal prices. Leaving in Jan-March 26th quarter, Tarski UK EBITDA improved by 15 million pounds to negative 48 million pounds. Most of the region's spot price improved In the UK steel safeguard measures that were originally introduced to support the domestic production are set to expire on 30th of June 2026. We welcome the proposed new trade framework and will continue to engage constructively with the government on areas that require further refinement. Effective 1st July 2026, the revised safeguard regime proposes a 60% reduction in the import quotas alongside an increase in the tariff from 25% to 50% with the objective of ensuring that 40% to 50% of the steel demand in the UK is met from domestic production. For our UK operation, this represents a very meaningful step. Over the last two years, we have reduced fixed costs by about 50%. from a base of approximately 1 billion in FY2024. However, weak demand conditions and the influx of low-cost imports have continued to weigh on performance, with EBITDA losses of around 98 pounds per ton. The revised framework, therefore, has the potential to materially improve the operating conditions and performance. With price increases coming through in Q1, we expect quarter-on-quarter improvement in the earnings going forward in the U.K. The work is progressing on the 3 million ton electric arc furnace in Port Talbot. Major demolition work has been completed and securing access to high power electricity is critical for our planned transition. While we are working with the electricity system operator and the National Grid for new electrical infrastructure, National Grid has formally alerted us that their connectivity project is delayed. This is critical for Tarastee UK for the project commissioning and we are in conversation with National Grid and the UK government on resolution of the issues. In Netherlands, the fourth quarter EBITDA at about 58 million. translates to about 34 euros per ton. Higher volumes and improvement in costs were mostly offset by a drop in realization on a quarter-on-quarter basis. As in the past years, a lot of focus in Netherlands has been on cash flow management and the company continues to perform exceedingly well on the cash flow management and is effectively net debt-free in spite of very challenging operating and regulatory conditions. Let me now come to the balance sheet. Our priority is to keep the balance sheet strong and robust. Post-pandemic, we prioritized deleveraging in FY21 and 22 and reduced debt by about 40,000 crores, including prepayment of about $3.6 billion of offshore obligation. Gross debt currently stands at about 92,382 crores and the net debt at about 80,100 crores. For the last few years, we have been focusing on onshoring of overseas debt to mitigate the rupee depreciation risks. This has certainly been very beneficial, particularly in the last year. If we did not proactively undertaken the onshoring, gross rate would have been significantly higher by about 12,500 crores on account of INR depreciation alone. The equity stake in acquisitions that you often see in the disclosures in Tata Steel Holding actually relates to this on-flooring initiative. As a result, the overseas debt has come down from about 50% of the total debt in 2021 to 18% of the total debt in 2025-2026. By FY28, it will go down further when our overseas dollar bonds are repaid. The only overseas debt that will remain is the working capital line for our overseas businesses. I would also like to mention, and since all of you keep asking me about deleveraging, in the last 12 months, we have actually prepaid around 9,100 crores of debt from our internal cash during the year. You don't see the same on the face of the financial statement. Because the overseas debt is now valued at 94 to a dollar versus 88 to a dollar a year back, which accounts for about 4,200 crores. And there is increase in the leased asset, which is about 2,500 crores. Hence, you only see a 2,400 crores as the reduction on a net basis. Collectively, these measures reinforced Tata Steel's position as one of the few steel companies globally rated as an investment grade by international rating agencies. Our year-end net debt to EBITDA has reduced to 2.3 times, down by 1 tonne compared to 3.3 times two years back. During FY26, our total spend on CAPEX was about 14,000 crores on a consolidated basis, And we intend to increase the allocation of the same NFI 27 to around 20,000 crores, of which more than 60% will be spent in India. I would now like to explain a bit on what you would have seen in the press release and filing on the material uncertainty in TSM. Over the last two years, as Naren mentioned, a lot of work has been undertaken in the coke and gas plants and the company has resolved many issues raised by the environmental agencies. As he mentioned that many of the standard requirements are actually above the industry standards and some of them are technically not doable and not followed anywhere else in the world. After careful assessment, we have agreed therefore to close down the CGPs in a planned, controlled and a safe manner in the future. We are currently in discussion with the province and the environmental agencies on the timeline that ensures a controlled and a safe in sequence in the future. As mentioned in the filing, we have received a letter post the balance sheet date from the local environmental agencies regarding their intent to revoke permits without any specifics. This causes the material uncertainty element for Tardis in Netherlands while preparing the basis for the financial statements. Additionally, the local regulatory environment is evolving with authorities proposing standards that go beyond sometimes the EU norms and global practices. Outwithstanding these challenges, we are committed to operating in a safe, compliant and environmentally sustainable manner and we are deeply engaged with the environmental agency, the provincial leadership and the government for a mutually accepted resolution. With respect to decarbonization of our steelmaking facilities in Netherlands, we continue to remain engaged with relevant authorities on the transition roadmap. Lastly, on the ongoing crisis in West Asia, as Naren has already mentioned, it has some implication on the cost side on a near-term performance. While our upstream operations, i.e. the crude steel production, has remained largely unaffected, the downstream operations initially face some supply chain constraints, as you mentioned on propane. We managed to mitigate the impact via a range of initiatives, including alternate fuel, shipping routes, and pre-polling shutdowns in some cases. Costs remain a focus area. However, we will continue our cost transformation program in financial year 27 where we expect these initiatives to mitigate a certain proportion of the pressures. Before I close, I am happy to share that the board of directors has proposed a dividend of 4 rupees per share for fully paid shares of face value of 1 each. With that, I will end my comments and open the floor for questions. Thank you so much.

Thank you, sir. We will now begin with the question and answer session. We will be taking questions on audio and chat. To join the audio questions queue, please mention your full name and email ID in the chat box. Kindly stick to a maximum of two questions per participant and rejoin the queue should you have a follow-up question. We will unmute your mic so that you can ask your question. To ask questions on chat, please type in your question along with your full name and email ID in the chat box. We will wait for a moment as the queue assembles. The first question for today is from Sumangal Levathia of Kotak Securities. Sumangal, please go ahead and ask your question.

Thanks for the chance.

Firstly, on the topic of the closure of coke and gas plants, just want to understand if we replace this with the market purchase, what is the cost impact? And then a broader question, given so much regulatory uncertainty in the region and constant surprises, is there a case to revisit our entire investment plan in the region?

Yeah, Harshi? You are on mute, Kaushik.

Sorry, Swamangal. So to your question on the cost penalty, so to speak, on buying of coke, I think given the fact that we are still assessing as far as the timing is concerned, There will be a impact because we will not have the gases in particular and the credits that go into coke making. But other than that, we are also looking at options to supply from various sources which could also include India. We will have some time to plan for it. That's what our basic assumption is and that's why we are deeply engaged with the government, the provincial and the regulator. On the second issue of the case for reinvestment, Actually, some of these are prerequisites to be resolved before we undertake any large investments. So, while the point is very valid, I think that's precisely the conversation that we are having at this point of time with the various stakeholders. And it's not that the coke and gas plant shutdown affects the plant or the volumes as such, because there are alternative ways to do that. But to look at the future and the new configuration of assets to invest, we need to resolve some of these issues before we take on any large commitments.

Okay, okay. I missed the early part. So, we are saying that there is not much cost impact as for us.

No, I am saying there is a cost impact, but there is also an offsetting impact that is possible.

Okay.

Especially because the CO2 will go down. As I said, there are the pluses and minuses. The negatives are the fact that the coke gas, coke oven gas which is used for as an energy source will not be there. There will be a freight which will be incurred for bringing in the coke. On the other end, the CO2 will go down. So, there is a net impact. It also depends on at what time this transition happens.

Got it. And with respect to the delay in the electrical backup and infrastructure for UK, what sort of delays are we seeing and what is the best case estimate for commissioning of that plant?

So that is again being discussed. I think we have just been formally being told that there is a delay. We are working with the UK government and the National Grid and ESO which is this electricity supplier to see if we can mitigate but somewhat between say six months to eight months will certainly be there, maybe higher after we have built the plant. So the initial estimate was somewhere around 18 months It has come down to 12 months and we are actively working to see if we can reduce it further. But there will be some delays imminent.

Okay, I understand. My second question is with respect to NINL expansion. So we've not yet heard any progress on the exact timelines and capex or any update on that. And generally, if you're seeing a lot of players adding capacity aggressively, looks like at least on the map that we might lose market share over the next five, seven years. So is this a concern for us and any shift or change of expansion pace for us that we can expect?

Yeah. So, yeah, Kaushik, you want to give indication on the NINL timelines and then I will address the second part.

So, NINL, Swamangal, initial work on the site preparation is already started. We are getting permissions on different parts. And the FEL3, which is our basis for making the final allocation of capital, is also very advanced. So in the next few months, we should be able to announce that. One of the reasons is that there is a lot of work that needs to be done on the site because this is going to be a 10 million ton site. So we are careful from a regulatory point of view to get all the approvals so that we can do it. and equally be tight on the capex. So we are fairly advanced in that. We'll take a few months and come back and announce. And that is then going to ensure that we can execute it quickly. So that's as far as the NIL is concerned.

You know, Sumantil, on the market share question, you know, the key point is market share and what? Because the way we are looking at it is, We are more interested in market share and key segments, attractive segments. And we want to make sure that our market share in the segments that we target or the attractive segments as we call it is at least twice our overall market share. That's why I focus a lot more on downstream, a lot more on value-added products, solutions, etc. So, why we have the optionality to grow the upstream. I think even with the existing sites between Kalinga Nagar, Meera Mandli and Nila Chill, plus Jamshedpur at 11 million tonnes, we already have the optionality to grow to 45 to 50 million tonnes in India. Once we start the Maharashtra site which was also announced that potentially adds another 6 to 10 million tonnes. So that optionality is available for Tata Steel which is not there 10 years back when we were operating last year of Jamshedpur. The question is how fast do we want to build and where based on the demand, based on the balance sheet and many other things. But what we are very clear is in the market segments that we are strong in which we think are very important like automotive, oil and gas, the retail franchise that we have, we will continue to be the dominant player, the number one player in all these segments.

I understand. I will fall back in the queue. Thank you and all the best. Thank you, sir. The next question is from Satyadeep Jain of Ambit Capital. Satyadeep, please go ahead. Am I audible? Yeah. Yes, I just wanted to understand to the previous question. So, you mentioned that coke oven is going to be coke you may buy from India or somewhere else. Just trying to understand because the auditors have flagged the material concern to go in concern. So, it seems like it is not just coke. If you can just get coke from India, why flag material there is to go in concern? Because we understand some rolling and casting facilities have also been shut down. So, can you clarify? And in case you shut down these facilities for five years before, let us say, BRI comes, then what do you do with the labor there?

Shall I?

Yeah. So, Satyav, I think we, first let me deal with the auditor's question, which I thought I'd explain because in the letter that they have issued, which, so we are in discussion with all of the stakeholders in a very deep, almost on a daily basis engagement by our colleagues in Netherlands. So the letter which had come in did not have any definitive pathway, dates or transition specifics. So which actually, if you are an auditor, or if you are even the company, you will actually ensure that these specifics are necessary to get into the next level of planning and creating the investments, etc. So, when the letter comes in, the auditors are naturally going to say that there is no way in which a specific date is mentioned or a year is mentioned. And that actually creates the uncertainty. And that is what is being used saying the company is in receipt of a letter. First of all, the co-governance cannot be shut down in any unplanned manner. As I said in the past to some of you that a co-governance is more like a chemical factory than a steel factory. The co-governance in UK was the last major facility to shut down because it cools down on its own. You have to give time. There is a make safe requirement. There is also a permit requirement to undertake a shutdown. So if all of these is the sequential way of shutting down in a planned, controlled, safe manner, if a letter lands up which basically does not articulate that path, then it creates an uncertainty because that uncertainty is an unhandleable uncertainty. And that's why that is being flagged off here. I share your concern and that is also our concern in some ways because that is precisely what we want to do. The co-governments are 40-50 years old. So, and the standard sum of them for the design of the co-governments is not technically feasible also. So we said we will shut down. We were anyway to shut down soon after the first phase of the DRI EF would have come out. This is now potentially earlier than that. And that gap or the transit gap, intermittent gap, would have been filled by purchase of coke, which I think is perfectly fine. There will be cost penalties, but as I said, there are CO2 benefits which will also come in. There will be a net effect out of that. But this is more about the physicality, not about the financials. And that is what created the material uncertainty. We hope that this will get resolved in the coming months as we are engaged with the government and everybody sees the logic of doing it safe. Because we can't shut down in an unsafe manner, because then it will be the regulator will be responsible, not Artisteel Netherlands. So these are the kind of things that we are working on. And that's the basis on which the auditors have said that TSN is prepared on a going concern. But there is material uncertainty given this letter. So the cause of the material uncertainty is only this letter. It's nothing else. And that is something that needs to be understood.

The DSP, the DSP is subject to slightly different. So there were some emissions from the DSP which exceeded the limits. So we had, you know, in the interest of view, transparency with the regulator declared it to them. Jointly it was looked at. We have closed the DSP. Some changes have been made. Some trials have been run. And we hope the DSP should be back up if we have all the requisite approvals later this month. So that's on the DSP side. I think the other question that you said, yes obviously if you shut down facilities that will have an impact on labour in those facilities etc. So that's why this whole transition needs to be planned well and that has been our submission to the regulators as well because some parts of the site will then be shutting down earlier than what was originally planned. So the transition will happen you know firstly as Kaushik said once we are clear that we have a social license to operate going forward as well, and then whenever we are ready with the investments.

So just to add to what Naren said, that if there is any permanent shutdown of any facility, the people will have to be restructured. So that is given. It's not that, and that's what we have done in the UK also. So that is something that is an inevitable consequence of a shutdown, whether it's planned or unplanned. In case of unplanned, it becomes a lot more complex to handle.

Secondly, on the transition to DRI, so while you are saying that you will have an agreement with the government, just in the context of when you, when this entire investment was made by Corus also back in the day, the regulatory landscape changed over time. This entire permit, the ability to remove permit came a few years ago, much after the initial investment. So, how do you grandfather, you know, looking at the regulatory landscape can change later on also after you make the investment? And so, while you evaluate all of this, in case there is a plan to not go ahead with this investment, does it mean you accelerate India investment? And why not explore global majors for tie-ups like some other players are doing? Is that something you have explored to accelerate expansion in India? That's the other question. Yeah.

So, let me put it this way. I don't think the India growth is being held back because of anything that we do in Europe. If at all, you know, we've done what we wanted to do in India. That has not come out. The second comment I want to make is in our view, we felt that it's better for us to go ourselves. We have had joint ventures in the past. We still have a joint venture with Nippon Steel for a continuous annealing line. We had a joint venture with Blue Scope for the color-coating line. So we believe that in a home market, we should ideally be by ourselves because this is our core market. This is where our strength is. This is where we have a strong franchise. And hence, we actually want to build capacities by ourselves in India. So that's our view at least based on what we've seen so far. Kaushik, you want to add?

Yeah, I just wanted to say that actually we think there is power in consolidation and in fact we are buying out our JV partners in India because the synergies that we see in the marketplace in the manufacturing excellence, supply chain actually makes us very clear that if you have to leverage the power of size, it has to be consolidated rather than fragmented and therefore we think that it is important for us to have one large way of moving forward. As I told you that we are merging NINL, we bought over Colors. We are buying out many of our JV partners across the value chain because that gives the leverage and the power to be more stronger in the market. And I think, as Naren mentioned, I must re-emphasize that the India growth is not impacted by what is happening or not happening in the rest of the portfolio.

And what about change in regulatory landscape in Netherlands? Let's say How do you grandfather?

So I think that's a good question and an important question. So the joint letter of intent had a few condition precedents on both sides. There are condition precedents which the government has to fulfill and the condition precedents that we have to fulfill. Some of the condition precedents also require the regulator to also fulfill. Because they are also a party in some way, province is a party in the JLOI. Before we get into anything which is binding, a lot of this has to be contractually agreed. And we are not there at this point of time. Because no investor, including us, will make an investment unless it is not just grandfathered, it is contractually guaranteed. to run its course across a certain minimum period of the life cycle by which the recovery of the investment happens. And in all of this, even the government is an investor. So I think that is even more important. So I think we are not there as yet as far as the FID is concerned. These are the preconditions that we need to resolve before we get there. The JLOI is the Joint Letter of Intent is live and active. We are in active conversation. But these are very important things because end of the day it will be also even after contractually there will be a certain judgment to be taken on how this works. So we are not there at this point of time and the regulatory landscape is certainly a very important fulcrum which needs to be assessed every time we move one step further. So that is also getting registered in our process to see as to what are the pros and cons, what is tolerable, what is not tolerable, etc. So we are not in that zone. We will have to do that work as we discussed with the regulator, understand the planned way of doing it because we are also very conscious apart from our own money, we will not take public money to make investment which are at risk.

Thank you, sir. The next question is from Alok Debra of Motilal Oswal. Alok, please go ahead.

And congratulations on good numbers. Just had a couple of questions. First is on the NSR. So we saw good improvement in the fourth quarter. So if we just highlight what's the pricing been in April and May and what we could expect in the near terms in terms of the realizations. And second, on the coal cost, what's the coal consumption cost for 4Q and what we could look at in the first quarter?

Yeah. So, as far as realizations are concerned, in India, we expect Q1 to be about 6,000 rupees higher than Q4. In UK, we expect it to be about 80 pounds higher in Q1 compared to Q4. And in Netherlands, we expect it to be again about 80 euros higher in Q1 compared to Q4. In terms of coal, I agree the coal consumption increase, the delta increase we expect in Q1 for India over Q4 is $15 per ton and in Netherlands is about $10 a ton. As you know in UK we do not buy coal and the iron ore increase in Netherlands is expected to be over $5 per ton Q1 over Q4. But I just want to add here that some of this suggests that the spreads are going to increase There will be an improvement in spread certainly in India, but there are many other costs which are coming in beyond coal and iron ore because of the impact of wastage as Kaushik mentioned. So, some of that will add to the cost, but overall yes, we expect margin expansion in India and in UK and some margin compression in UK because, I mean in Netherlands because of the issues that we have had with the DSP and we would have lost. almost one and a half months of production.

Sure. So, the other cost which you mentioned for India in the first quarter, how much that could be in per turn basis? Samita, you want to?

Let that quarter finish before because we don't want to give you something and then come out with something else.

Sure. And also, if you could just highlight some bits on the India demand, because we are seeing some of the competitors also adding, rather increasing their capex, you know, guidance for this year and next year, like big numbers are coming out. So, what's your view on the India demand over the next two to three years? If you could just pull out through some color on that. Thanks.

So, the India demand is expected to be strong. You know, I think, you know, as long as there is infrastructure-led growth, right. So, I think that is a big assumption and hopefully the current macroeconomic situation will not provoke a rethink on the spend on infrastructure because that is a big part of India's steel demand growth because it has been more investment-led growth rather than consumption-led growth, it has been more infrastructure-led growth than consumption-led growth. And if that continues then obviously the demand to grow some steel will be greater than the So, we are, I mean, till two months back, we were expecting at least 8 to 10% growth in steel demand going forward. Now, as a GDP, if we are able to recalibrate the GDP and say the GDP will grow a bit less, the steel demand may grow a bit less. I think the automotive sector is quite strong, continues to be strong. We need to see the impact of rising fuel prices, particularly in commercial vehicles. But I think passenger vehicles are strong, two-wheelers are strong. construction, a bit of a slowdown, a bit of an impact of labor not being there. I do see some pain with the MSMEs as well because, you know, there is pressure at the end of the value chain. Some of them are also struggling with a little bit of working capital issues, etc. So I think so far it's good. It looks positive, but obviously it's not insulated totally from what's happening around the world.

Sure, yeah. That's all from my side. Thank you and all the best. Thanks.

The next question is from Pallav Agarwal of Antique. Pallav, please go ahead. Pallav, can you speak up?

We can't hear you very well.

Is this better now, sir?

Yeah, that's better.

Yeah, okay. So, first question was on the volume guidance for 27, you know, given that we only have the EAF coming on stream.

Will there be any re-bottlenecking at Jamshedpur which can add to the volumes? The volume will be at least 2 million tonnes better in this financial year compared to the previous financial year with most of it coming in India and largely because the Kalinganagar ramp-up is pretty much complete, you know. So, that is the delta volume. In fact, Ludhiana has only half a million tonnes in this. So, you know, we have not taken the full Ludhiana volume because it is still being ramped up, but you will have pretty much the full Kalinga Nagar volume. So, we expect it to be 2 million times plus for next financial year compared to, or rather this financial year compared to the previous financial year.

Sir, so the Ludhiana profitability would be lower than the other, the general last one is profitability.

Yeah, it will be lower, but You know, the whole model is different. The profitability there from a conversion point of view will be lower, but you're going to save about Rs. 3,000 of transportation cost. Because otherwise that same steel you would have spent Rs. 3,000 moving it from Jamshedpur to Louisiana. Right. So you will save that. So when you look at it from a price minus transportation cost point of view, you'll have a higher price there. And so the cost may be higher than making steel out of iron ore and coal. but your realisation if you net it off rate will also be higher compared to what we have shifted from here. Secondly, we are less insulated by the weakening rupee and also the coal prices, etc, etc. So, some of the cost increases that we will face when we are importing coal, paying for freight, buying in dollars, the Lugiana plant is insulated from all that because we are using scrap.

Can we fix this? And if I could add, Pallav, if carbon taxes, you know, come in, then obviously that adjustment will also happen because, as you know, it's far more carbon efficient.

Sure. Although, just on the value-added proportion going up, so how much of a potential EBITDA, you know, per ton can that add, you know, increasing the proportion of steel pipes or, you know, other WAP products in the mix?

Yeah. So typically our downstream businesses, even if you take the steel being transferred to them at market prices, add anything from 5 to 10% EBITDA. Okay, so that's the incremental EBITDA you will get from the downstream businesses, even if you transfer steel at market prices. That's why we've always had downstream, we are planning to grow it. The tubes business, which is now 1.2 million tonnes, we want to take it to about 4 million tonnes. The wires business, where we are the fourth or fifth largest in the world, is close to a million tons. I mean, it's about 600,000, 700,000 tons. We want to take it to a million tons. The packaging business, actually, between Europe and India, we are one of the largest in the world again. We want to double the India capacity, which we've already announced last year. Then we also have colors. We feel that we can do much more. in color-coated steels. We were in some sense limited by the JV, and that's why we bought out Blue Scope Share, and we plan to double the size of the colors business also in the next 12 to 24 months. So I think we want our downstream businesses to maybe at least be about 50 to 60% of our volume. The whole objective is to sell less HR in the market and sell more value-added products. Because selling HR, you are always under pressure on prices, international prices, it's a commodity, you're sending to the, selling to the tube makers, you know, etc., etc., whereas we feel with less HR in the mix, more cold rolled, more galvanized, more packaging steel, more value added products in our mix, we would be better equipped to deal with the cyclicality which is inherent to the business. Demand is always there, but the question is the profitability that you need to protect.

Sure sir. So lastly, like any plans on monetizing your online platform which I think is going fairly well.

So is that something you intend? Not monetizing it as in nothing, no plans just yet to spin it off and you know monetize that value. But yes, this is a very important part of our route to market. As you saw the GMB, I mean we have the retail business GMB growing very fast. And this is again being sold with no discounts at the same EBITDA margin that you see in the rest of Tata Steel. And then this is almost 5,000 crores now. And then we have what we call Digica, which is for the SME business, which is also growing well. Just now we are focused on selling what we produce. It's more about enhancing our reach, particularly in the retail business. Now we have orders coming from Indians living across the world who are doing some construction in India, maybe building homes or buying steel for their parents or relatives who are building homes. So we get orders from all over the world now. So we see it as a platform to access customers who we didn't have access to earlier. So we are focused on building it as a very important channel and route to market for ourselves. Sure, sir. Thank you so much. Thanks.

The next question is from Penakin Parekh of HSBC. Penakin, please go ahead. Thank you very much. So, my first question is on the Netherlands and the entire saga on the CGP. Now, when we go back to the UK operations, we have seen EBITDA losses of 13,000 crores over the last three years. Now, at this point of time, given the entire uncertainty that we are seeing in Netherlands, First of all, what would be the immediate cost impact because of buying coal core gas from the plant? How will the profitability be impacted? Second, what would the, if there are closures happen earlier in the next 12-18 months, is there a possibility that the Netherland operations become loss-making at current steel prices and current cost structure?

So, let me address that and then Kashi can add to it. See, as I said before, with the exception of maybe one year, two years, which is two, three years back when we did that, last one is relining. Every year in the last 18 years, the Netherlands business has been EBITDA positive and cash positive. That's why, as Kaushik said earlier, it's debt-free even today, right? So, going forward, if the poker wins close, we expect it to continue to be EBITDA positive, maybe making less EBITDA than we had hoped we would make. But it will always be EBITDA positive and So far, the Netherlands operation has operated without any support from India. So I think we expect that to continue. I think the sole material uncertainty issue, as Kaushik said, was because the letter did not give any timeline. And it is like saying that if you don't have a planned closure, then there is a material uncertainty to some assets on that site. I think that is largely the messaging. So the business going forward. will continue to be EBITDA positive. The other thing is, obviously, as you've seen in the last few months and going forward, we expect steel prices in Europe to be closer to the steel prices in the US. It was traditionally closer to the steel prices in the US, but over the last two, three years, the gap had widened. And the gap is closing now because Europe is also putting restrictions on movement of steel into India, whether through quotas or through CBAM and everything else. So we expect the pricing to be better in Europe going forward. We expect Ardacha operation to continue to operate on EBITDA positive basis even if the co-covens are closed and obviously there will be some margin compression but we expect them to take care of themselves. The key question is the investments in the future and whether we have the social license to operate for that and that is a question, that's a point which Kaushik made earlier. Those decisions will be taken once we are comfortable that we have a social license to operate for the future as much as we are seeking one now. Kaushik, you want to add to that?

No, I think broadly the same. I think the issue is always on the safe and orderly closure, which I think is also something the regulators also want very clearly. So we will have to come to that. Once that happens, there are projects which have to be undertaken to segregate physically the CGPs, the coke and gas plant with the rest of the plant. So that will take time and that is the reason why we are saying safe and controlled closure. Once that happens, you have a new operating model where you will import the coke from outside, be it from India or elsewhere. And you run it on that basis. But that will not make this site unviable. It can actually continue on the same basis. Whether it has the affordability to make a large investment to transit or not is a question that we are testing at this point of time. And apart from the affordability is obviously whether the goalposts on regulatory standards will keep changing. If these two are satisfied, there is a path forward. If not, there is a alternative path forward too. So we are just now in that evaluation stage and exploring as we are engaged very deeply. It is a very serious issue as far as the new investments is concerned. And therefore, all of this has to be resolved before any commitment for new investment is done by Tata Sea Netherlands itself or whether we will be looking to take the public money that the government has offered us.

Thank you. Just two more quick questions. The first is on UK. Given that there is going to be a delay between the plant commissioning and the electricity infrastructure, How will the plant operate without the infrastructure and will it be EBITDA positive without electricity infrastructure? The second is in terms of Melanchol, given that we are still in the process of getting all the approvals, what is the earliest estimate of the first deal?

So, on the first one on UK, two things here. One is we hope to be EBITDA positive during this year now that the prices have increased. started improving and so that can continue till such time the EAF starts. You know, we can continue to supply the slats from here and continue to convert into steel and we are, you know, now that the prices, the policy changes that we have sought have come, we are expecting the business itself to be a bit positive going forward. So, that is one part. The second part is, while as Kaushik said, there is currently a visible delay of about 12 months on the electricity supply What we are trying to see is to get at least some connection, one line as soon as the plant is ready so that we can do some trials. We can test out some of the equipment etc. so that we do not waste the time that we are waiting for the full electricity connection. And then what we are planning to do is a ramp up that we had scheduled after the commissioning. We are seeing how to compress that to make sure that we catch up on the project IRR that we had targeted. So, if we do the preparatory work before the full electricity connection is there, then we can hopefully do a quicker ramp-up. On the natural cost, do you want to comment?

Yeah. So, just to add to what Naren mentioned on UK, So, currently, till last year, we have been sending about 1.2 million tons of slag to UK. We are increasing that from India, from Tata Steel, Kalinganagar, to about 1.8. That is our target to increase. There is a reason why I am saying this. because we often look at the UK EBITDA as a standalone. UK actually, the Port Talbot facilities in UK is effectively now the fifth hot strip milk for Tata Steel. And if we actually look at what is the system EBITDA that we talk about, we make about, say, 7,000 to 8,000 rupees per ton of EBITDA on the transfer of the slabs to UK on a market basis. And with the increase in prices, we are seeing about 4,500 rupees per ton of EBITDA by UK itself on the volumes that we transfer. So, on a system basis for the slabs going to the UK, we make as Tata Steel consolidated about 12,000 rupees per ton of EBITDA. So that model will continue till the EAF starts and then as Naren mentioned that when the power lines get commissioned or activated, we will then do the initial hot trials and then move on to the part of using it. So there is no point where We will not be having the power lines, but we are going to have the, that is not going to happen on a full-fledged basis. So, just thought I will clarify. On NINL, I think between our July and September, we should be able to start the, get the FID. And once we get that FID, the target date is somewhere around 2930.

Thank you, sir. The next question is from Indrajit Agarwal of CLSA. Indrajit, please go ahead. Thank you for the chance. I have a couple of questions. First, of the 12,000 crore CAPEX in India, can you state it by project, in this project format, broadly?

So, I think, Indrajit, I think there is a, it's very difficult to give offhand those kind of numbers, but effectively, There are certain downstream expansion projects that are going on, be it the tin plate, wires, etc. There is a... HRGAL. Yeah. HRGAL. HRGAL, HRPGL in Tarapore. Then there are, there is a Cochlemans project, which is in Jamshedpur, which is going on. There is a tail end of the payment that is to be done as far as Kalinga Nagar is concerned. And then there are the sustainable projects. And there is some allocation for NIML. So, all of these make up for and then, sorry, then there is also mining side. So, all of that taken into account is 12,000 crores.

Sure. Thank you.

If you are looking whether we are allocating money for NIL, the answer is yes.

That's excellent. So, after the 2 million ton increase this year, over the next 2-3 years, we will hardly have any volume growth in India. Is that understanding correct or what kind of volume growth can we have in India, let us say from FY27 to FY30?

So, there are two, three things here. One is, of course, once the year comes, you can use those slabs to convert into finished products in India and there are some projects that we are thinking of in terms of plate mill and various other downstream. That is one possibility. The other thing is, more than the volume growth, we will have a lot of value growth because of all the projects that Kaushik just mentioned. In terms of HRPGL line, which is a 0.8 million ton line, the tin fresh capacity is another 0.3, 0.4 million tons of capacity. And the tubes and wires, which we will be value adding during the time. So, you will see a higher percentage of downstream in our mix. The steel making may be close to where it is till the big volumes come up in Nilachal. We also plan that in the next year or so, we will announce the next EAF project, maybe somewhere in the west, possibly in Maharashtra. And that is something also which will, because that can be built like, you saw in Louisiana, we built that in two years. So that can come up quite fast. Sure.

Thank you, sir. Before we take the next question, I would like to remind the participants to please limit your audio question to two per participant. Should you have a follow-up question, you are requested to rejoin the queue or post it in the chat box. The next question is from Tarang Agarwal of Old Ridge Capital. Tarang, please go ahead. Hi, good afternoon. Am I audible?

Yes, please.

Okay. Sir, on the India business, we see end-use consumption in the retail sector sort of slowing down from what you've delivered over the past two years. It used to be about, my sense is, 2.8 million tons about a couple of years back, then moved to 3.4 and about 3.5 million tons this year. And, you know, the construction and infrastructure sector, we actually saw a degrowth. in FY26. So, and while in your opening comments, you did allude to Tiscon and Stellium achieving record volumes. So, just wanted to get some clarification in terms of what's happening in those end use sectors.

Yeah. So, you know, as far as Tiscon is concerned, we sell Tata Tiscon to projects and we sell Tata Tiscon to retail. Okay. Retail for us is far more attractive than projects. So, over the years, we have increased or pretty much doubled our sales to retail, which used to be at one point in time, 100,000, 120,000 tons a month, is today over 200,000 tons a month, right? So, while the overall discount may not have grown, the mix has changed very significantly. And projects, you would see the started discount of projects has come down because that's a little bit more price to win market. As far as stadium is concerned, a lot of the stadium sales will also depend on further value addition options. As the galvanizing lines come up, which it has just come up in Kalinga Nagar, we will have less cold roll to sell. So if we have cold roll, we would rather sell it to auto because that gives us better realizations than to sell it to distribution. Or we sell it as galvanized, which gives us better realizations than selling auto. control as it is. So, you will see this going up and down depending on what is the right product mix to set. So, that is maybe what you are seeing in the numbers, but we can get back more specifically because I do not remember the exact numbers at a product level.

Hi, so just on Asiana, so is Asiana channel for the retail induced consumption?

Yeah.

Okay, and yes, please go ahead. Yeah, so the customers who buy from on Asiana are individuals who, I mean, the individual house builder is a target market for us as far as retail is concerned. That's why we sell more than 200,000 tons of terra triscone. So, it is an order generation platform. So, people come on the platform, place the order, the fulfillment is done by a physical distribution chain. So, anywhere in India, I think within 72 hours or something, you place the order, you will get the steel through our dealer network which we have over 10,000 dealers now across the country. And this is exclusively only Tata products. Does it include Tata Pravesh in there or only steel? No, it includes steel, Pravesh, tubes, wires, everything. All Tata steel products. But I would say 90-95% of the sale is Tata, it is called. Got it.

Thank you.

Thank you, sir. The next question is from Amit Dixit of Goldman Sachs. Amit, please go ahead. May I order this?

Yes, please.

Yeah, so two questions. One is on the capacity expansion plans. Now, if you look at your annual reports over the last five years, it has been vacillating between 35 to 40 billion tons of India capacity by FY40. Sorry, FY30. Now, we have significant brownfield optionality, maybe more than our peers in India. And we have got, I mean, decades of experience So why can't we continue, I mean, why can't we have parallel expansions across our projects? Because downfield expansion, replicating the similar furnace, and of course, you know, not seizing the market share to the peers. Why are we not pursuing that? Balance sheet is in a great state now, 2.3x net debt to EBITDA, 10,000 crores of free cash flow last year. And India, you know, consumption expected to double by FY32. So, just wanted to get your thoughts on that. I mean, what is stopping us? Why are we being so circumspect about it?

Sure.

Thanks, Amit.

So, yeah, you're right. I think the optionality today is we can operate parallelly. Whereas, like I said earlier, when you have only one jump shift tool, you have to operate sequentially. And now you have And at Kalinga Nagar, we could operate parallelly in two sites. Now, we can operate parallelly in four sites. That optionality is there. So, in some sense, for us, the Nilaachal expansion of 5 million tons, which is to go back to one of the other comments you made, the blast furnace will be an exact replica of the 5 million ton blast furnace that we have in Kalinga Nagar. So, we are replicating assets wherever we can. The steam melt shop will be different because it is a long products plant. and primarily we are working on the Bhushan 1.5 million ton expansion, which will take it to 6.5. There is a change in the way we do projects. Earlier we used to just announce a project and, you know, then go around getting all the approvals. Now we announce a project only after we get all the approvals, and we have an FEL 3 level of detailing, so that then our ability to stick to the schedule and the cost is is very high, because we've gone with a great level of detail, and I think that's been a different approach than what we did traditionally. So that's why you see the announcements happening only when we have all the approvals in place, and we have an FE and 3 level of readiness, and then once we announce it, then we can move much faster. Case in point is the Lugiana project. I mean, we built it in two years because the FEN3 level of detailing was done. All the approvals were in place. We announced the board approval about two years back. We were supposed to get it started in April this year. We started it in March, right? And so we expect going forward, all the projects which Kaushik talked about, which has the HR galvanizing line, the tin plate line, or the combi mill that we recently commissioned, is a different approach. Compress the execution time and do it on time and schedule with no overruns and do it when all your approvals are in place. So maybe that's why you're seeing us being a bit more circumspect as you said. The other thing is of course like I said we strategically we feel it is not just about steel making capacity because let's understand one thing the cost of iron ore in India is going up. Right. So the value pools will shift. Value pools are not necessarily upstream going forward. Some of those value pools will shift downstream. Because for us we have been buffered a bit because we have had our own iron ore. But if you generally look at cost of iron ore in India, it is really going up. Everyone is bidding over 100% to acquire the iron ore. Cost of coal will keep going up because India has no choice but to import a lot of coal and with the rupee where it is. So input cost for steel making is going to go up. So we need to be conscious of that and that is why we feel that we need to focus a lot more on the downstream than we've done. We probably have a good downstream presence compared to many of our peers, but we want to do even more. So that's why we feel that that is an area which we need to grow much faster than in upstream. And a lot of our focus on investments over the last year, whether it's acquiring JV partners, whether it is building new facilities, I've been on that. The third thing is we want to strengthen our whole entire value chain. And hence, as Kaushik just mentioned, even logistics. You know, we are buying out some of our partners. We want to control the entire value chain, which can help us in our competitiveness and everything like that. So, I think the way we deploy capital, the way we see the value, etc., may be different from the way some of our peers see it. But the best thing is we have the optionality. Like I said, even with the current size, we have the optionality to go to 45 to 50 million tons. So, it's at some point in time, we say, hey, there's still a lot of money upstream, even though the iron ore prices are high and everything else, you can always go there and do it. The other thing you need to keep in mind in India is the capacity to execute projects because you are going to the same three or four people or maybe two, not even three, to execute on the projects. So that's also something, you know, do they have the capacity to execute that we plan to do and you don't want to get stuck doing multiple projects which can't happen as you plan. So I think there are a number of ways to look at it and we believe having that optionality open with brownfield, the cost of expansion will be lower. You can pace it better. When you acquire like we did for Bhushan, etc., you have a single bullet of 35,000 crores going in and your balance sheet obviously gets disturbed. But when you do this, as you pointed out, our cash flows that we generate in India more than takes care of what we need to spend and so we can manage that debt also well. So that's the point of view. I'm not saying that ours is necessarily the right point of view, but that is our point of view.

Great, sir. The second question is essentially on, and you pointed it out in the answer to the first question, TMIL has been increasing stake over there. I would say very prudent move. Logistics is something that, you know, we are literally struggling in steel industry. So just wanted to get a little bit more color on that. What kind of investments we are seeing over there in either slurry pipelines or rake procurement or any such thing to do, maybe coal convert, any such thing to do with the logistics part?

So TMIL when it started was actually started as a port operations and shipping kind of logistics company. But today 80% of its revenue comes from moving stuff on the ground rail. So it's one of the biggest operators in the country. I think it operates about 55 rigs now. So, you know, a lot of our movement is through TMIL. So we see TMIL also manages a lot of warehouses for us to do just-in-time delivery for our procurement, etc., TMIL is also looking at water waste movement because one of the areas the government is also looking at is the water waste which is close to Kalinganagar, connecting Kalinganagar to Paradeep and all the way to Angul. So, TMIL can play a role there. So, logistics, like you said, is a very important part of a cost. I do not know if you know, but we have 5% of the freight revenue of Indian railways that is steel. So, because we move so much iron ore, so much coal and steel, etc., So, I think logistics is very important and hence we thought that we should simplify as much as possible. So, now we are buying out IQ, which is a German company who has been with us for more than 20 years. We still have NYK with us. Though with NYK, we have another company called Tata NYK, which does the shipping. So, Tata NYK does the shipping and TMLL, which is Tata Steel and NYK going forward, will do a lot more on the ground. So in terms of the deal structure or anything, Kaushik, maybe you can give more details on the deal.

Yeah, no, I think TMIL, as Naren mentioned, is very strategic. And when you talk about the slurry, our slurry company is the JV that we have with Lloyds, BRPL, and we will expand that slurry pipeline. We're looking at that transport logistics very importantly. We will look at doubling capacity there. So, I think the entire logistics space between rail logistics, waterways logistics and slurry are the three very important ones that will be the frame going forward. And it is in that context, it was best that we consolidate our holding versus keeping it at 50. It was already a JV with 51% holding. It will go to 74 and NYQA is the balance. So, we will look at the next stage of growth in our logistics and want to make it integral to our growth plans also. So that it has been a profitable venture for all the three partners. It has been paying dividend. The capital has been returned many times over for all of the three partners. So I think it is a question of now making it the larger landscape. And VRPL will look at the study pipeline as one of the key areas to grow in the future, not just in East, but potentially later on in the in Western India also.

Thank you, sir. The next question is from Ashish Kejriwal of Novava. Ashish, please go ahead. Yes, please. Okay. Sir, two questions for me. One, when we, sir, guide about 6000 rupees price increase in first quarter, I hope we are including that our auto contracts also, which was not there in third quarter, fourth quarter, or this over and above that?

Yeah, this includes part of the auto contracts, but most of the benefit from the auto increases will come in Q2. We will get some of it in Q1.

Okay, great. And secondly, we were discussing about value addition as a way forward for our Indian business. But at the same time, we have not discussed much on the Maharashtra venture which we were discussing last time. So, any update on that?

Yeah. So, in Maharashtra, we have moved, we are discussing with the government, we have identified The land, we will be, as we get into more finality, we will talk about it, both on the mining side as well as on the land side. And so hopefully in the next three months or so, we will give you an update in the next Q1 meeting about where we are on the land. more specifics about it. I don't want to say it now because we need to get formal approvals in place and post that. So that is also as Narin mentioned the optionality and to Amit if you are still listening it's not the circumspect part it is actually more definitive part. We know exactly what we want to do and therefore we kind of want to handle it in a manner where it is more definitive and Because the, like in Maharashtra, for example, we are very clear as to what we want to do, what we are looking at it. The government is on our side in terms of supporting these investments. We have to work together and make it more definitive and then we make those investments. So it is a question of how we pace it up. And so in Maharashtra in particular, I will, Ashish, I will be able to give you more specific about it in the next call.

Sure. And lastly on the year of, if I understand correctly, now maybe we have to purchase coke from the market in case if we have to close it and this can be delayed or this can be closed only within a year time. Now in case if this goes forward to really to close our blast furnace and other things also in order to reduce emissions and by that time if we don't reach agreement with the government, Then do you think that either we will close down or again we can look for, you know, some joint venture or buying or selling the assets or still we can go ahead with the, you know, investment to reduce the carbon emissions over there? How to look into it?

Yeah, so if you look at it, if you want to paint a scenario or scenarios, then yeah, each of them has its own pluses and minuses and options. As of now, we want to run the plant as it is. The coke plant, the coke and gas plant is what we have consciously and over time studied. We have a very detailed work done as to how it will get closed. And that's been shared with the regulators and the environmental agencies and that is why we have a path to go forward. It is not next 12 months. It is not that it can be done very soon. It will require time and that is the time that we are in discussion with. We have made it very clear. Not for anything else because there is a way in which we can do it by segregating the co-covenant circuit to the rest of the plant and also ensuring that it is a make safe closure. So if that happens, then I think there is a path forward, which is the best path forward at this point of time, because as I said, there will be cost penalties, but the way the market is moving and the way we will optimize it within the overall Tata Steel system, we should be okay. If it goes beyond that, then we will have to look at different alternative scenarios and what scenarios actually work for both for the Tata Steel Netherlands business and its business continuity as well as for Tata Steel as a primary shareholder. So, all of these have to be looked at and then comes the investment case as we talked in detail earlier in the call. Those are in sequence. So, we have a lot of things to settle and set up and set right before we talk about the investment.

Thank you, sir. The next question is from Ritesh Shah of Investec. Ritesh, please go ahead.

Yeah, hi. Thanks for the opportunity.

Sir, first is, if you give color on 6,000 rupees of pricing increase into Q1, if you could break it up, April, May, probably the past, which is there from Q4, and something on the flat and loss, I think that's the first easy one.

So, rather than give you month-wise, all I can say is the prices went up in March, April, and May, right? Or rather, May is still, you know, being worked out. That's as far as the trade market is concerned. There is some softening in long products largely driven by the secondary producers because I understand some of them are struggling a bit with working capital, high cost and disposing some of the steel that they have. So there is some pressure in long products in May that I see. Flat products are still holding out because I don't know if you know but prices in China have gone up over 20-25 dollars in the last 3-4 weeks. So international prices are going up. In fact, Indian flat product producers also have export options now. Export prices are not too bad. The weaker rupees also helping exports. So export options are growing. So I would say flat products, the pressure is a bit less because international is picking up. China prices have gone up. China's exports has come down to less than 10 million after quite a while. And if you see the first four months of this year, Chinese exports are down. So I think flat products, Overall picture looks a bit better. And for flat products, it's very auto-driven also, directly, indirectly, and auto so far has been strong. So that's the story on flat products. Long products is a little bit more sensitive to construction. Construction has struggled a bit in the last couple of months simply because of, firstly, the elections and labor going home to vote and things like that. And secondly, producers... So, the gap between the prices of secondary producers and primary producers has kept increasing. So, I am not giving you a month by month breakup, but the guidance of 6000 is largely driven by what we have seen so far till May. We are not expecting any significant upside beyond May, apart from the auto contracts. Auto contracts are still being finalized. And normally what happens with auto contracts is once they are finalized, then you raise the debit notes. So some of the money will come in in the next quarter. So in this case, we are expecting maybe 30% of the benefit to come in this quarter and 70% of the benefit to come in next quarter. Wonderful.

Second question is on Tata Steel, Netherlands and UK. There are multiple commutations for Netherlands, Cocoa, Air France, CBAMP. How should we look at normalized spreads basically if one had to assign a particular scenario with a higher probability? How should one look at spreads for Tata Sea Netherlands? Likewise for UK before and after year and again for both the variables basically how is it that one should understand the impact of CWAP?

So as far as Netherlands is concerned our base assumption for spreads is business as usual for the next 12 months at least. That is, so whatever you have seen in the historical spread adjusted for CBM uplift that is happening in the market today and for the coal prices that are, that has also moved up, the spreads are no different. So, there is no adjustment of any combination that we have in our base case scenario for financial year 2027. In fact, 2027 and 2028. We have to look at the conversations that is happening currently with the regulator and the other stakeholders to see where is the landing ground for the timing of this. Because there is a physical, as I mentioned many times in this call, there is a physical timeline required to make a safe and controlled change. And that is what we are working on. So as far as Netherlands is concerned, next 12 months on a base case scenario, we should get what we are looking at. The other issues on gas price increase in West Asia are separate, but purely from raw material to steel price spread, it should be on the basis of what has been historically the baseline required just for the price increase that is happening. UK, typically, if you look at it from a post-EF, typically good EFs work in the range of 6% to 8% EBITDA margin. And our assumption is that is the same. But we have more value-added products in the portfolio. So we should be able to get better than that. Cost efficiencies, fixed costs, anyway, is being driven down. So when the EF comes in, it should not have any big changes in fixed costs. other than the combination cost changes because the power will become an important factor, scrap will become an important factor and it will replace the cost of slabs or HR which is being bought at this point of time.

Thank you, sir. I would now like to hand over the conference to Ms. Samita Shah for the chat questions. Over to you, ma'am.

So I think just continuing on the questions on the U.K., I think there are a couple of questions around this. One is what is the, you know, in terms of the import quota reduction which has happened in the U.K., how does it affect the sale of slabs from India to U.K.? And I think you've answered a lot about U.K. in general, but I think some questions on when do we expect U.K. to break even given the increase in prices in the U.K.? ?

slabs are excluded from quotas.

Yeah. And the break-even, we are obviously given that the prices have gone up significantly since March. You know, these announcements came in March. So, the prices that we were seeking, and I think we've said that in the last two-three calls, the prices in UK were 100 pounds lower than the prices in Europe. Now, the prices in UK have caught up with the prices in Europe. In fact, it's slightly higher. And certainly, as Kaushik said, the EBITDA losses will shrink this quarter compared to last quarter and will shrink again the next quarter. Now whether it shrinks enough to be positive next quarter is something we are still working out because the Middle East impact on gas prices in UK and energy costs etc. is something that is being worked out. But largely we are heading in the right direction and because we got the policy support that we have sought.

Yeah, thank you. Just in that same vein, I think you answered it earlier, Naren, but because I think there are a few questions on this. Given the price increases or the guidance which we have given in both Europe as well as UK, is there significant spread expansion expected in both these genres? I think you answered it, but maybe a few people have missed it.

So let me put it this way. The prices are going up in both places for sure. Like I said, Q1 prices will be about £80 higher per tonne in UK compared to Q4 and in Netherlands will be about 80 euros per ton higher, right? And the cold costs in Netherlands are going up by about $10. So, obviously, from that point of view, there is an expansion. But we expect margins to improve in UK, like I just described, EBITDA losses to shrink and come closer and closer to zero during this quarter and next quarter. But in Netherlands, this quarter, because we will lose about two months of DSP production, that's over 200,000 tons of production, there is an impact of that on our performance in this quarter. And hence, while we will be EBITDA positive, we will not see a better EBITDA than in the previous quarter because despite the price highs. But going forward, because we There is an import quota in Europe as well. We expect prices will continue to be on the higher side in Europe than we've seen in the past and the spreads will be supportive. So once our operations gets back to normal, I think we will start seeing the benefits of that. Overall, the plan this year on an EBITDA basis is higher than the plan for last year. Thank you.

I think some questions on the lawsuit in TSN in terms of, you know, the earlier lawsuit, if there's any update on the status there, please.

No, there is no material update other than the fact that we have time to file our defense on the lawsuit, on the mask claim. and we are working on it. There needs to be experts who will study on the parts raised in the claim, and that's what we are doing. So at the time when we have to submit, we will do the submission and defend it.

Thank you. We'll move to India now. Some questions on what is the iron ore and full production in India, even in FY26.

I think INR would be close to 45 million.

Yeah, it's about 44 million, yeah.

Yeah, it will be about 45 million tons. And I think we've sold about 4 million tons, if I'm not mistaken. That's right, yeah. And so we will continue to produce what we need for our own use and we'll continue to maximize the sales. I think the challenge always in INR is more about logistics and evacuating the material. And when we have logistics constraints and the priorities on our own in-house consumption. As far as coal is concerned, the in-house production of, I mean, the coal that we, after wash, we have roughly about 3 million tons of coal available for consumption. What we produce, the raw coal is maybe closer to 6 million tons. Yeah, yeah.

Just a little higher. Okay. Thank you. Any visibility on INR sourcing post-2030 and any color around that?

I think like we said, we will continue to participate in options, but we will be prudent on what we bid. We will not bid beyond what we think makes sense. And we will focus on the INR leases that are available closer to eastern India because most of our capacity is coming in east. The second part of post-2030 strategy is what is evolving in Maharashtra for us. Our plan for Maharashtra is also hinged on iron ore availability in Maharashtra. So that is the second part of the plan. The third part of the plan is, of course, to look at imports. We've already got a shipment from Canada. We have very high quality ore there. So while that may not be, you know, the most important part of our plan post-2030, but it allows us to test the logistics of bringing in iron ore from outside the impact that good quality iron ore has because one of the disadvantages of Indian ore is the quality apart from the FE is not necessarily the best. The alumina is high and there are many other issues. So, when we look at import with low alumina, you can have better value in use. So, we are looking at imports also as an option and that is why with most of our capacity moving closer to the sea because with Kalinga Nagar and Nilachal that is 25 million of capacity which is closer to the sea than Jamshedpur. The bush and plant at 10 million tons will also be closer to the sea compared to Jamshedpur. So imports becomes a better option than for a site like Jamshedpur which is far more inland. So strategically they are in a better position, better place for imports. So that's where it is. We also have the optionality of our own leases when it comes up for bidding in 2030. we can decide, we will decide on what should be a bidding strategy for our own leases. What of it that we want to keep, what of it we may not want to keep, what is the price we are paying for it, etc. So, that optionality also exists for us. So, I think we are objective is to have more options, keep these optionalities open so that we can decide as appropriate.

Thank you. Then there's a question on Hisarna. Is there any update on the project and any learnings we have reached, you know, we have on that and what is our thought on this going forward?

Yeah. So, I mean, so these two projects, Hisarna and EasyMelt, are very, very important for us for the future. The advantage of Hisarna is it can use any raw material. I mean, it can use poor quality, I know poor quality coal. It can use thermal coal, et cetera, right? And you don't need coca ones. You don't need a sinter plant. So there's a lot of advantage of it. And we've been at it for more than 10 years. And the good news is our pilot plant in Netherlands is doing quite well. We have a team there for the last few years. As was mentioned, we are also working with Nucor on this project. They are also very keen because they are also keen to build a plant like using Hisarna in the U.S. because they also need some iron feed into their electric hot furnaces. So when we set up the pilot plant in, not pilot, the pilot plant is in Netherlands. When we set up a commercial scale plant in India which may be close to a million tons, basically New Corbin work very closely with us. And I think the engineering is being done for that. We are very excited about this project and it can be a game changer because then that gives you even more optionalities as far as raw materials is concerned. Thank you.

And the last question I think which we'll take for today, it's on the FX debt in India. What about it? What is the amount of the FX debt in India? So you said 18% of the consolidated, which is 17,000 crores. Yeah, that's offshore, but I think the question is how much of it is on India.

A billion is on offshore. So, I think the effect state in India is somewhere around 5-6,000 crores, right?

Yeah, it's 750 million of that ECB. And just to clarify to everybody, it's fully hedged. So, we don't have a currency exposure on that. Yeah. So I think we have taken most of the questions and I think also took a lot of questions on the audio. So thank you everyone for your participation today, especially on a Saturday. I hope this helped you better understand the results and look forward to connecting with you next time. Thank you and bye.

Thank you. Thank you for joining us. Thanks.

Thank you very much.