Tata Steel Ltd Q1 2019 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Rajesh V. Lachhani - HSBC, Research Division - Analyst : Sir, my questions have been answered. Thanks.

Question: Dhawal Doshi - Haitong Securities - Analyst : Sir, first, a clarification. INR 458 crores of ForEx loss in the other expenses, this, you're talking of the stand-alone financials?

Question: Dhawal Doshi - Haitong Securities - Analyst : And this is separate from the INR 1,100-odd crores, which is in the other segment, right?

Question: Dhawal Doshi - Haitong Securities - Analyst : So the net ForEx loss would be to the tune of INR 1,558 crores? Or it will be restricted to INR 1,100-odd crores?

Question: Dhawal Doshi - Haitong Securities - Analyst : Okay, there will be elimination as well. Okay. Sir, secondly, with regards to Bhushan Steel, so there was a news article sometime back wherein Orissa government has given us the permission to use the iron ore from our Kalmong mine for the Bhushan Steel operations. So just wanted some clarity in terms of the timelines in terms of just starting the transfer of iron ore. And what is the quantum of iron ore that we plan to work with?

Question: Dhawal Doshi - Haitong Securities - Analyst : So 3 million tons in total, which can increase going ahead or this is it that we're planning to do?

Question: Dhawal Doshi - Haitong Securities - Analyst : Okay. And sir, lastly, on the inorganic acquisition. So yes, my question does not pertain to Bhushan Power given the bids have gone today. Are we still evaluating other acquisitions apart from the Bhushan twins, that one we've acquired and one we've bid for? So there are news that one of the steel companies in Jharkhand is also calling for bids. So are we looking at or evaluating any of those assets?

Question: Dhawal Doshi - Haitong Securities - Analyst : Okay. Is there any targets in terms of debt that we are setting which we won't exceed in case of any further acquisitions?

Question: Dhawal Doshi - Haitong Securities - Analyst : So this 3x net debt to EBITDA long term, sir, so how long would that be, I'm sorry?

Question: Mir Mohd. Enan Muntasir - Emirates NBD Asset Management - Analyst : Yes, I just had just a very few small questions. One is, I wanted to know in Q2 last year, we had a very small cash balance, the cash and cash equivalents, which we saw at the end of the year go up by quite a bit. What is the Q1 cash balance like?

Question: Mir Mohd. Enan Muntasir - Emirates NBD Asset Management - Analyst : Perfect. Sorry, for my ignorance if I missed, if you guys have mentioned this earlier, just wanted to -- just a little explanation on any, what you call, -- could you please tell me what are the effects that you're actually seeing on the ground now with the devaluation, the effects that have -- that's coming up due to the devaluation?

Question: Mir Mohd. Enan Muntasir - Emirates NBD Asset Management - Analyst : Right. Any -- what does it feel like in, like, 8 months we're going to have most probably some news out of the Brexit? So any possible -- what are you seeing, what could happen on that side of things?

Question: Ritesh Shah - Investec Bank plc, Research Division - Analyst : Sir, my first question is about the news on the Southeast Asia business. Basically, it was on the block, is there any truth to it?

Question: Ritesh Shah - Investec Bank plc, Research Division - Analyst : That helps. Sir, second question is, in the recent thyssen presentation, it indicated that because of the JV, pension-related payouts would reduce by more than EUR 200 million. I think to my understanding in the earlier calls, we had indicated for $200 million. Please correct me if I'm wrong over here?

Question: Ritesh Shah - Investec Bank plc, Research Division - Analyst : Okay. Specific to the JV, there were accumulated losses at Tata Steel Europe. I think in the earlier calls also, we haven't made any comments on deferred tax assets or probably lower tax rate. Any visibility over here? I'm more looking at from a cash flow perspective of how the dividends will play out?

Question: Ritesh Shah - Investec Bank plc, Research Division - Analyst : This helps. Just last question. Sir, I think there have been concerns on the valuations on the assets that we have looked at. Sir, it would be good if you could highlight the growth optionality for those assets and -- along with the timelines. Say, with Bhushan if you're expanding, say, over the next 3 years or 5 years, to what capacity or, say, Bhushan Power whenever it comes in your lap? If you could highlight something specific to Bhushan Steel, it would be of great use.

Question: Bhavin Chheda - ENAM Holdings - Analyst : Sir, just a industry-level question. The recent currency crisis and Turkish lira has depreciated sharply. Do you see any impact in the European market on this? And second is what's your view on China winter cuts because we read a lot, and we see the dollar's strength impacting all the commodity prices and (inaudible) is falling, but the steel has shown tremendous strength. I think part of it is because of the China winter cuts and what would happen in China. So what's your view on these 2 issues: one impacting Europe; and, obviously, China impacts globally?