Tata Steel Ltd Q2 2026 Earnings Call Transcript

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

Question: Vibhav Zutshi - JPMorgan Chase & Co - Analyst : Congratulations on the strong results. The first question is basically on the European steel industry in the context of the October 7 protectionist measures and CBAM implementation. So some of the European steel players have talked about higher inquiries from new customers and a bit of a destocking cycle happening next year. So just wanted to get your thoughts on how you see utilization prices moving into the next year? And also that UK is probably not going to be directly benefited from the protectionist policy, right? Yes. So just some thoughts on that. LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. NOVEMBER 12, 2025 / 6:30AM, TISC.NS - Q2 2026 Tata Steel Ltd Earnings Call

Question: Vibhav Zutshi - JPMorgan Chase & Co - Analyst : And just on UK then, would you reiterate the 4Q FY26 guidance of EBITDA breakeven?

Question: Vibhav Zutshi - JPMorgan Chase & Co - Analyst : And just a second question on India. So on the Neelachal capacity expansion, any time lines with respect to the Board approval? Because earlier we are planning to get it by October. So any reason for the delay and the updated time lines?

Question: Sumangal Nevatia - Kotak Securities Ltd - Analyst : Sir, my first question is if you could share our guidance on the cost and the prices, both for India and then Netherlands, UK separately for the coming quarter. And then generally, I just want to understand what's happening with regards to the safeguard duty. The provisional duty has expired, and we're yet to see the government notification. So just want to understand what is the latest year and what is our expectation? LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. NOVEMBER 12, 2025 / 6:30AM, TISC.NS - Q2 2026 Tata Steel Ltd Earnings Call

Question: Sumangal Nevatia - Kotak Securities Ltd - Analyst : So given the spot spreads in UK, we are expecting the losses to widen. Is that the right understanding? And also Netherlands, given the pressure on prices, at least for third quarter, we are looking at some softer margins?

Question: Sumangal Nevatia - Kotak Securities Ltd - Analyst : Got it. Sir, my next question is on expansion. Now at India, I mean is it safe to assume 3, 3.5 years once we take the Board approval, so that time line in terms of Neelachal? And what is the peak level of volumes we can achieve in the existing capacity? So our -- I mean, question is coming from the background that maybe from FY27 onwards, I think we will lack further room in terms of growth. So if you can explain that. And also with Netherlands, you said next year is the time line where -- I mean, we are looking to freeze all the discussions with the government. So FY28 is the year when CapEx actually starts? And any CapEx intensity you can share there? LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. NOVEMBER 12, 2025 / 6:30AM, TISC.NS - Q2 2026 Tata Steel Ltd Earnings Call

Question: Satyadeep Jain - Ambit Capital Pvt Ltd - Analyst : So I just wanted to start with UK. We can understand that the CBAM in UK actually kicks in '27, so one year after the EU CBAM. Then in the context of current imports, what options, what is the process? Because from my understanding with Europe is that EU Parliament has to approve the report and findings of EU Commission, EU Council and EU Parliament, and the current safeguards expire in June '26 or so. When you look at UK, what exactly is the process timeline? Do they have to take the entire study and then the decision will be taken by Parliament? So the entire process, are we looking at some kind of support in '26 or not? And the cost savings that were there in the Rishi Sunak government on network tariffs and/or power cost being declined, has it already kicked in? So just wanted to understand Europe -- UK in general first.

Question: Satyadeep Jain - Ambit Capital Pvt Ltd - Analyst : The quota also, given it needs to go through a formal study and then final decision will be taken by the UK Parliament or is it executive decision? So is there a realistic chance of this quota reduction in UK if it goes through in '26, or are we looking at maybe quota reduction also whatever it is in '27, 28?

Question: Satyadeep Jain - Ambit Capital Pvt Ltd - Analyst : Okay. Secondly, on Netherlands, on the -- in the Joint Letter of Intent, it is mentioned, I'm just checking on the wording of the Joint Letter of Intent. It has mentioned that there will be support of up to EUR2 billion for Phase 1. But explicitly, it is also mentioned that there will be no tailor-made support for Phase 2 as things stand. So does it mean that government is making it very clear they will not support any expansion beyond Phase 1? And also this import quota that we are looking at, needs to be ratified by the parliament, there's a lot of opposition from downstream users in Europe. Hypothetically, if we see this go through and European steel prices converge with Europe with US, do you see some challenges? I just want to understand because Europe historically has been a very different market versus US, but with the opposition -- so two-part question. One on the Joint Letter of Intent. And overall, some of it potentially getting diluted? Or is that not a risk this current import quota reduction that you're looking at?

Question: Vikash Singh - ICICI Securities Ltd - Analyst : Sir, just wanted to understand, if you look at the Slide 10 of your presentation, though we have given a guidance to 40 million tonnes, we have not given the time lines for the same. And also the flat products are also increasing and long is coming after that. I believe that the long is Neelachal, so which is the large portion of that flat product, which expansion we are expecting? And if you could give us the time line for that?

Question: Vikash Singh - ICICI Securities Ltd - Analyst : My second question pertains to Netherlands. So we remember that we had this carbon-free carbon credit, which are gradually going down. So just wanted to understand, as we're starting the running green at a later part and that would obviously would take some time, how should we look at our cost structure there in terms of the carbon credit reducing? LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. NOVEMBER 12, 2025 / 6:30AM, TISC.NS - Q2 2026 Tata Steel Ltd Earnings Call

Question: Ritesh Shah - Investec Bank PLC - Analyst : A couple of questions. First, on Tata Steel UK. So what is the exposure from a revenue mix that we have from UK to Europe? And how are we looking to derisk it hypothetically if there are delays on the UK government taking a stance?

Question: Ritesh Shah - Investec Bank PLC - Analyst : That helps. Sir, my second question is on Tata Steel Netherlands. I think we have laid out certain details with respect to citing EAF, initially on natural gas, subsequently on CCS, finally biomethane and/or hydrogen. So there are multiple permutations over here. We also indicate support up to EUR2 billion. Possible to give some high-level thoughts on what could be the CapEx number because we know it is up to EUR2 billion, but we don't know what the CapEx number is. So how are you looking at the cash flow math? You did indicate no major cash flows next two years. But from an ROCE standpoint, from a cash flow standpoint, and from a capacity standpoint, how should we look at TSL? And if not for, say, support in Phase 2, would we still continue with our stance that we will maintain our volumes for Tata Steel Europe. I think that's something what we had guided earlier. So would we stand to it?

Question: Rajesh Majumdar - Batlivala & Karani Securities India Pvt Ltd - Analyst : Thanks for the opportunity. So I had a question on the cost takeout. You have already talked about INR54 crore, INR50 crore in the first half. How much of that has come from the Kalinganagar plant efficiencies? And how much more can be expected as we ramp-up gradually to the full capacities with the value-added segments?

Question: Rajesh Majumdar - Batlivala & Karani Securities India Pvt Ltd - Analyst : More specifically, sir, you earlier guided about, I think, INR2,000, INR2,500 kind of lower costs in Kalinganagar. So how much of that is achieved? And how much of that is likely to be achieved over the next few quarters?

Question: Rajesh Majumdar - Batlivala & Karani Securities India Pvt Ltd - Analyst : Right, sir. And my second question was actually on your ferrochrome unit selloff. I mean we bought this unit just three years ago, and we earlier proposed a 50% expansion along with CPP, and we also have the chrome ore mines. But suddenly, you decided to sell this business. So what is the problem here? I mean if it is a small thing, then it was a small thing even three years ago when you acquired it, so, yeah.

Question: Prateek Singh - DAM Capital Advisors Ltd - Analyst : The first question is on UK. So given all the uncertainty and volatility that we are seeing in UK and Europe as well, so how confident are we of the level of profitability once the EAF comes in? Or to put it differently, what kind of EBITDA do we see as doable given the current environment, current pricing and current raw mat costs? That's the first question.

Question: Prateek Singh - DAM Capital Advisors Ltd - Analyst : Sure. So just as a follow-up to this, so what kind of capacity does UK in particular needs? I mean, was there ever a discussion that maybe not put as big a capacity as we are planning and may be scaled down a bit given we don't need that much given how the environment is right now? Or we are okay with the current capacity that we announced for UK?

Question: Pallav Agarwal - Antique Stock Broking Ltd - Analyst : Sir, firstly, congratulations on the good set of numbers and also on the cost transformation initiatives, broadly on track. So on the Ludhiana EAF, so what kind of profitability can we look at you compared to the stand-alone Indian operations? Obviously, it should be lower, but to what extent it would be lower?

Question: Pallav Agarwal - Antique Stock Broking Ltd - Analyst : Sure, sir. Secondly, we used to highlight that probably on the pipe expansion part, so probably I think you were looking to expand from 1 million tonnes to 4 million tonnes. So I've not come across that in the recent presentation. So where are we on that initiative?

Question: Amit Murarka - Axis Capital Ltd - Analyst : On iron ore, like I wanted to get some thoughts on how are you kind of thinking about securing iron ore for Indian assets. I think in the last call, you did speak about it a bit. But could you also like help us understand, are you looking to get into some tie-ups with OMCs as well? Or it will be broadly merchant purchases? How are you thinking about it?

Question: Amit Murarka - Axis Capital Ltd - Analyst : Also, like is there any ballpark cost number that we can think of for your current captive iron ore mining? Or if you have done any calculations around it, what will be your cost of captive iron ore mining?

Question: Ashish Kejriwal - Nuvama Institutional Equities - Analyst : My question is on account of domestic demand environment because see, for -- after so many months or years, we are seeing that our prices are much cheaper than the landed cost of imports despite the fact that safeguard duty is implemented. So actually -- and when we see overall demand environment or demand, you can say, volumes from JPC, it seems to be on the higher side, but actually, price is not getting that reflection. So my question is, are we seeing excess supply scenario or lower demand which is affecting our prices? And in light of that, when we have guided INR1,500 price decline in Q3, are we factoring in that in December also, there is no price increase? That's my first question. LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. NOVEMBER 12, 2025 / 6:30AM, TISC.NS - Q2 2026 Tata Steel Ltd Earnings Call

Question: Ashish Kejriwal - Nuvama Institutional Equities - Analyst : Sure. So effectively, you are saying October, November also, we have not seen any price increase. And in our assumption, we are not taking any price increase in December also.

Question: Ashish Kejriwal - Nuvama Institutional Equities - Analyst : Okay, understood. Secondly, we have acquired 50% stake in BlueScope and at value of something like INR22 billion for the company, which is having net profit of INR62 crore, INR30 crore in the last two years. So rational-wise, I understand that we are going in the downstream, but the amount which we are paying is -- seems to be much, much higher if I look at on the profitability basis. So how can we explain that?