Tata Steel Ltd Q4 2021 Earnings Call Transcript

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

Question: Ritesh Shah - Investec Bank plc, Research Division - Analyst : Sir, I had 2 questions. One, a couple of years back, you had given certain initiatives to in some of the revenues from steel cyclicity, you had indicated about the expansion of downstream products, and you had been a target of more than 30% of volumes from downstream. Second was service and solutions, so 20% revenue by 2025. And third was grow beyond steel, new materials as a segment and 10% revenues by 2025. Sir, the first question is, where are we on those 3 particular variables?

Question: Ritesh Shah - Investec Bank plc, Research Division - Analyst : That's quite useful. My second question, again, goes back to the carbon thing. I think Koushik, you made a statement of GBP 20 million per quarter as a normal operating cost, and he also said is a function of production levels. Now this broadly equals, assuming 10 million tons, it's only $10 per ton. That looks like a pretty low number. If I have to compare this versus, say, carbon intensity for U.K., which is 2.22, in Netherlands 1.86 and the average value of the 10 most efficient installations is at only 1.3, so if one does a broad math and if you don't have any allowances, based on the current spot carbon prices, it could imply a deficit of nearly $400 million, if we don't have any allowances. So it would be great if you could provide some clarity on how much of the allowances that we have in stock. In the last call, you had indicated [6.45 million] for U.K. So it would be great to have some color on those numbers. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 06, 2021 / 11:00AM, TISC.NS - Q4 2021 Tata Steel Ltd Earnings Call

Question: Ritesh Shah - Investec Bank plc, Research Division - Analyst : That was -- that was the average value of 10% of the most efficient installations in 2016, '17. That's the benchmark for the European Commission was talking about, and they have invited [solution] on that. So that is one point.

Question: Bhavin Chheda - Enam Holdings Pvt. Ltd - Analyst : Yes, sir. Sir, regarding the Europe capacity, if I see the past presentations and all that, if I roughly remember between Netherland and U.K., the capacity is actually around 12 million tons. And if I annualize this quarter's run rate also, you can produce over 10 million tons, but we have been more doing around 9 million tons. So what kind of production ramp-up, if at all, can happen at European operations? (inaudible).

Question: Bhavin Chheda - Enam Holdings Pvt. Ltd - Analyst : Okay. And the second question was on the lower tax, which was paid. As Mr. Chatterjee also clarified, it was using the accumulated losses of Bhushan. So what's the pending number of accumulated losses of Bhushan, which will be available to offset in FY '22 also?

Question: Bhavin Chheda - Enam Holdings Pvt. Ltd - Analyst : So we will be almost on a full tax basis next year?

Question: Bhavin Chheda - Enam Holdings Pvt. Ltd - Analyst : And Pellet and CRM will kick in, in FY '23 first half?

Question: Ashish G. Jain - Macquarie Research - Analyst : Sir, firstly, on Europe, again, like Koushik said that the carbon requirement there will become more stringent. Now this GBP 12 that we have levied, do we see that as a mechanism to offset that impact? How is the customer response on that? Or should we think that the carbon impact could intensify as we go ahead from a cash flow point of view?