Tata Steel Ltd Q1 2021 Earnings Call Transcript

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

Question: Rajesh V. Lachhani - HSBC, Research Division - Analyst : I just wanted to -- if you can throw some light on Europe sequential movement in EBITDA per tonne. So last quarter, we had a $4 profit in Europe. And this is now a negative 43. So I just want to understand what can you -- if you can provide some breakup of how much was it due to lower realizations? How much was due to cost and how the carbon credit supported?

Question: Rajesh V. Lachhani - HSBC, Research Division - Analyst : Understood. So in case the carbon credits in next quarter are not available. Do we see a further decline in Europe EBITDA per tonne?

Question: Ritesh Shah - Investec Bank plc, Research Division - Analyst : Sir, my first question is what is the status on Bhushan merger? And what that would mean on tax synergies? That's the first question.

Question: Ritesh Shah - Investec Bank plc, Research Division - Analyst : That's useful. My second question is on Europe. How should one read conversion of GBP 3.6 billion intergroup debt-to-equity and GBP 1.9 billion intergroup debt being waved off, that is from a cash flow perspective. And secondly, the auditors have been flagging off concern on INR 20,000 crores of investment into TSGH. So what is the thought process behind this? And you did indicate earlier that there won't be money which will be flowing from India, Europe. But should 1 put the same into the context that ex Europe, that is India and the Singapore entities, there won't be money flowing in ex Europe into Europe. Should 1 look at that statement in that perspective?

Question: Ashish G. Jain - Macquarie Research - Analyst : Sir, is it possible to quantify the government support amount which is there in the European EBITDA this quarter? And how could that number change in 2Q and going ahead as well?

Question: Ashish G. Jain - Macquarie Research - Analyst : And sir, when we say deferral, is it again linked to any particular level of economic recovery? Or these are deferrals for a quarter or 2 or much longer? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 14, 2020 / 6:30AM, TISC.NS - Q1 2021 Tata Steel Ltd Earnings Call

Question: Abhijit Mitra - ICICI Securities Limited, Research Division - Analyst : So I have 2 questions. Firstly, on the stand-alone product mix. So from a quarterly volume run rate in autos of around 0.5 million tonnes, down to 0.08 million tonnes, by what time do you feel you can go back to your old run rate? And what kind of mix change has it held to in this quarter? I mean this 0.5 million tonne coming down to almost 0 and had to be sort of diverted to exports. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 14, 2020 / 6:30AM, TISC.NS - Q1 2021 Tata Steel Ltd Earnings Call

Question: Abhijit Mitra - ICICI Securities Limited, Research Division - Analyst : Right. That's helpful. And secondly, on the standalone operations, what kind of cost initiatives can you take? Because there are certain line items, which we see, for example, in Bhushan, the employee cost has gone up by INR 60 crores on a Y-o-Y or on a Q-o-Q basis. So are there any sort of cost takeouts that you can see, you can implement and sort of look better if you can throw some light?

Question: Bhavin Chheda - Enam Holdings Pvt. Ltd - Analyst : So can you guide us on the current capacity utilization now in August around plants in India and Europe? In India, I mean Jamshedpur, Kalinganagar, Bhushan market has they reached 100% and above?

Question: Bhavin Chheda - Enam Holdings Pvt. Ltd - Analyst : So in Europe 75%, 80% you mean IJmuiden, IJmuiden would be at 95%, 100%, right?

Question: Bhavin Chheda - Enam Holdings Pvt. Ltd - Analyst : Both are around 75%, okay. And in terms of the iron ore integration for Bhushan Tata Metaliks, Tata Sponge, how much percentage it would be at right now?

Question: Bhavin Chheda - Enam Holdings Pvt. Ltd - Analyst : So it should be close to 100% now for all group companies, right?

Question: Bhavin Chheda - Enam Holdings Pvt. Ltd - Analyst : And my last question, there was a press article regarding U.K. government investing close to GBP 1 billion for 50% or so stake in Port Talbot operation, which can be carved out separately. So any time lines or any further talks on same? Because as -- I think as you mentioned in the call, Europe is still in very bad shape. And though there is a steel buy and see all across Asia, U.S. and -- Asia, India and even U.S. recovering, Europe still doesn't look to be generating free cash flow positive or even a positive EBITDA. So -- and demand is also expected in volume terms to remain down 15%, 16%. So it is not going anywhere for next 3 -- 2, 3 quarters or so. So is there any time lines for cash support or that deal happening soon?