Tata Steel Ltd Q1 2026 Earnings Call Transcript

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

Question: Sumangal Nevatia - Kotak Securities - Analyst : I'll start with the bookkeeping one. If sir, you can share what is the price and cost outlook in the coming quarter versus what we've seen in 1Q, both India, UK, and Netherlands?

Question: Sumangal Nevatia - Kotak Securities - Analyst : Understood, sir. Got it. Sir, next question is on the cost transformation. Yes, congratulations on delivering on 1Q. So I just wanted to understand, one, how is the breakup between India, UK, Netherlands in 1Q. And when we're saying breakeven in UK if you can share what's the latest thoughts by when? Is it still 2Q? And this cost transformation, is it in addition to breakeven in terms of we going into positive UK as well? Or this is basically, including the cost transformation, we will be approaching breakeven?

Question: Sumangal Nevatia - Kotak Securities - Analyst : Understood. Got it. And just one last question on expansion. We have not yet announced or taken Board approval for NINL expansion. So I just want to understand what is holding us back, given we are already ramping up Kalinganagar and maybe in 18, 24 months, we will be running at a rated capacity. So when do we expect some announcement on expansion?

Question: Prateek Singh - DAM Capital - Analyst : So the first question is largely on prices. So Indian steel prices seem to be at a 10% kind of a discount post to China prices for safeguard. And we have not yet seen any improvement in trade prices. So does this mean that the seasonal impact this time is quite bad. And as a corollary, how are we seeing the government spending, especially state governments, whereas some states are facing fiscal pressure. So can we see some price hikes happening or would it happen once monsoon is behind us? That's a first question. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 31, 2025 / 6:30AM, TISC.NS - Q1 2026 Tata Steel Ltd Earnings Call

Question: Prateek Singh - DAM Capital - Analyst : And the second one is for Koushik. Koushik, you mentioned in UK, we are optimizing on the cost of substrate. If you can elaborate a bit more on that, given it's a commodity, what else are we thinking about? Is it going better? So saying a bit of pricing, what is the --

Question: Satyadeep Jain - Ambit Capital - Analyst : Two questions. First, on the profitability of mini mills in general in UK and Ludhiana. So if we look at Ludhiana as UK during the transition period and once the EAF comes up, what -- this would be state-of-the-art plant, I would believe at par with any mini mill in Europe. So during this transition, we were obviously importing substrate and running it through and after also, the only constraint is it the safeguard quota in UK, which is pulling the overall profitability down and maybe not realizing the breakeven EBITDA in the near term? Is that the only constraint? And if that is not solved, that could be maybe a structural constraint, this time you understand in the UK and Ludhiana is again on EAF, but we don't really have a lot of cases of EAF profitability. So if you can maybe guide to how do we look at profitability of Ludhiana, once it comes on? So that's the first question on profitability of mini mills in UK.

Question: Satyadeep Jain - Ambit Capital - Analyst : Just a follow-up, Naren, on this quota. So generally, I have this decision on the transition in UK company took some time back. And the since our quotas were already in place at that time that time also the argument would have been the quotas exceed demand. But now going to government now when you've already started the entire process. Would it not be prudent to do it before going into the entire transition? And will it slow down since you're already committing capital before there is a review that you've got.

Question: Satyadeep Jain - Ambit Capital - Analyst : Fair enough. The same question on the expansion. You mentioned environmental impact study, maybe hopefully in the next couple of months. Given there is a different process, now you're starting construction after approvals, how should we, let's say, the company does get approval by October. What is the time line we should be looking at for actually commissioning of should we look at 5 million tonnes in the first phase, 24 months or 24 to 30 months from the date of construction, is that the time line should look at? And how should we look at the letter of intent in Netherlands? Any maybe update on discussions and time line we can get there?

Question: Amit Murarka - Axis Capital - Analyst : So I wanted to know a bit about the rollout of CBAM. We are now only five months away, like I was reading some reports that the government has exempted up to 50 million tonne annual imports by any customer, which exempts 90% of the customers from the obligations of CBAM, and that's what I was reading. So could you just throw some light about how do you think the rollout is shaping up to be? And are we on track for a timely rollout of January '26?

Question: Amit Murarka - Axis Capital - Analyst : I didn't mean million, sorry, yes. But exempts, I believe 90% of importers what like some of the articles are suggesting?

Question: Amit Murarka - Axis Capital - Analyst : And just a bookkeeping question. Like in Q1, like how much cost did you book for the Jamshedpur relining cost on the finding expense?

Question: Amit Murarka - Axis Capital - Analyst : Nothing is expense in the P&L. It's all CapEx.

Question: Ashish Jain - Macquarie - Analyst : Yes. Sir, my first question is on this cost savings that we've taken out. But if I just look at the EBITDA movement for quarter on quarter, it's kind of up marginally, and this is in spite of pricing being higher, and we're also talking of 11 billion of savings. How will we triangulate this? And where do we see these cost savings really getting reflected. Can you elaborate a bit more on this? Because I would think is without that cost saving, our EBITDA would have been actually down. Is it as simple as that to give it or there's some other way that view this?

Question: Ashish Jain - Macquarie - Analyst : Right. But Koushik, just to understand this a bit better. So let's say, booking full is down by $50 hypothetically, that will not be counting in this number, right?

Question: Amit Murarka - Axis Capital - Analyst : Right. Secondly, just -- I know this question was asked earlier, but just let's say, in NINL, whenever we announced, can you at least given the preparedness, we're talking about at the time of announcing the CapEx, shall we think that the execution time line could come down to between 2.5 years or that's too aggressive in terms of the execution period?

Question: Vibhav Zutshi - JPMorgan - Analyst : Just one question on the FX side. So given the debt-to-equity refinancing, is FX volatility expected to reduce because this quarter had a lot of adverse movements in both pound and euro, but it looks like we didn't have impact. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 31, 2025 / 6:30AM, TISC.NS - Q1 2026 Tata Steel Ltd Earnings Call

Question: Ritesh Shah - Investec - Analyst : A couple of questions. One is, how should one look at the pushing taxation part I think there's a --

Question: Ritesh Shah - Investec - Analyst : Am I audible now? My first question is for Koushik. How should we look at the ongoing Bhushan taxation thing? I think the debt which was waved off, it will have some implication on taxes. Is it something that one should worry out if you could quantify some numbers would be great?

Question: Ritesh Shah - Investec - Analyst : Logically, I'm with you, but law is law. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 31, 2025 / 6:30AM, TISC.NS - Q1 2026 Tata Steel Ltd Earnings Call

Question: Ritesh Shah - Investec - Analyst : But would it possible for you to quantify, if at all, or is it a pass?

Question: Ritesh Shah - Investec - Analyst : Perfect. Second is I noticed in the annual report, a contingent liability with respect to arise, which was around INR16,500 crores-odd, it has been taken off. How should one read into this?

Question: Tarang Agrawal - Old Bridge Capital - Analyst : Just a couple of questions. Sir, your target to contain debt by INR6,000 crore to INR8,000 crores for FY26, that remains, correct? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 31, 2025 / 6:30AM, TISC.NS - Q1 2026 Tata Steel Ltd Earnings Call

Question: Tarang Agrawal - Old Bridge Capital - Analyst : Sure, sir. Sir, just a couple of questions on the European business. I mean Q4, you had commented that the gross spreads in the Europe market have been at a multi-quarter low. Has that trend sort of continued? I mean my sense is it has. So I just wanted your comment there. How has that played out in Q1? Because what we see, these are fairly illiquid prices. So they're generally not representative of what's really happening on the ground. So that's one. I mean when I say the prices, the prices that we see from publicly all sources. So they may not be representative of the prices at which the contracting activity is happening in the market. And the second question, sir, Europe has been fairly sluggish now for almost two years, right, this entire operating environment, specifically for the steel industry. That, coupled with the fact that there's significant transition expenditure that the industry is to undertake. Has there been a change in the structure of the industry in terms of participants in the industry or the financial health of the industry?