Tata Steel Ltd Q4 2022 Earnings Call Transcript

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

Question: Abhijit Mitra - ICICI Securities Limited, Research Division - Analyst : Yes. I hope I am audible.

Question: Abhijit Mitra - ICICI Securities Limited, Research Division - Analyst : Yes. So first question is on shareholder returns. So any framework that we should look at it? I mean it's great to see INR 51 in dividend this year, but what's the framework to look at it? Should we sort of take this payout ratio? Or -- because clearly, over the next couple of years, it seems like your cash flow generation would be much higher than probably what you can probably allocate towards your growth capital projects. So any framework that you can give on that? That's my first question. And second question is a bit update and then probably to Mr. Narendran, given your rear separation units in Jamshedpur and Kalinganagar, is there any possibility to sort of look at production of this inert gases like neon and others? Have you sort of looked at it? Any thoughts on that would be great.

Question: Vishal Chandak - Motilal Oswal Securities Limited, Research Division - Analyst : Okay. So my first question was with regards to your long-term carbon plans for Europe, given the fact that your competitors, SSAB, Kisan, et cetera, they have all lined up CapEx of about $4 billion to $5 billion over the next 4, 5 years to transition into green steel. What would be our strategy in Europe in that regard? That's the first question.

Question: Vishal Chandak - Motilal Oswal Securities Limited, Research Division - Analyst : So my second question was with regard to the steel cycle. Now we have been looking at never-like-before steel prices in Europe in the Asian market, but China has started slowing down, and it's not known whether, and how much of stimulus they will do. So in that scenario, do you think it would be more prudent to bring down the leverage or the absolute debt level significantly low before embarking on the growth CapEx? Because once we commit to a growth CapEx beyond a certain point in time, we enter into a point of no return. So the CapEx has to be committed. And overall, in the past cycles also, we have seen steel companies have committed to a large amount of growth CapEx at the peak of the cycle. And after the cycle has turned around, it has been very difficult in managing the debt subsequently. So I just wanted your thoughts on how do we think -- because it still is a cycle, the prices will never stay at the current levels for a long time. It has to come down.

Question: Vishal Chandak - Motilal Oswal Securities Limited, Research Division - Analyst : Yes. Sir, just a follow-up on this. You mentioned that there is no more capacity addition happening. And therefore, there is no such disruptor. But at the same time, the counterpoint over here, what we also hear is that the consumption has also slowed down significantly, not only in China but across the world, and therefore -- but the mills which are already have been commissioned over the last decade or 2, continue to churn out the same amount of steel. So therefore, on one hand, while there are no more additional capacities being built, the existing capacities themselves are sufficient enough to flood the market. So just wanted to -- on that line.

Question: Kirtan Mehta - BOB Capital Markets Limited, Research Division - Analyst : I had a sort of question on the NINL. You have indicated that your first priority is to sort of take it up to a record volume of 1 million tonnes. And in the longer term, there is an optionality to increase it to 10 million tonnes. Would it be possible to share the options that you would be considering to develop your Long Products portfolio at this point of time? What could come over the next 2, 3 years? 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 04, 2022 / 6:30AM, TISC.NS - Q4 2022 Tata Steel Ltd Earnings Call

Question: Kirtan Mehta - BOB Capital Markets Limited, Research Division - Analyst : Right. And on Long Products at Neelachal, to take it up to 4 million tonne, what level of CapEx would it require? Some initial color.