Tata Steel Ltd Q4 2025 Earnings Call Transcript

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

Question: Prateek Singh - DAM Capital Advisors Ltd - Analyst : So just wanted to get a sense of how prices have moved currently versus the last quarter, both in Europe and in India. That will be the first question.

Question: Prateek Singh - DAM Capital Advisors Ltd - Analyst : So given we have long-term contracts, Naren, so how should we see it? Because prices in the spot market have gone about $150 per tonne over the last 2, 3 months, so is it like 2, 3 quarters down the line, you'd be seeing the full impact? Or it's futile to track those prices and prices will change at the year-end. So how should we see it? . 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 13, 2025 / 8:30AM, TISC.NS - Q4 2025 Tata Steel Ltd Earnings Call

Question: Prateek Singh - DAM Capital Advisors Ltd - Analyst : And my second question is just a bit of a medium-term question. So what is your view on Jamshedpur given the legacy cost issues and a bit of operational disadvantage we have given smaller blast furnaces there? Is there a medium-term plan here? .

Question: Ritesh Shah - Investec - Analyst : A couple of questions. First, I think we have taken an approval of infusing another $2.5 billion into Europe. Any specific reason for the same given we already are on a route where we have funding from the government in UK. And Netherlands, also, you have a transformation program in place, if you could please help us understand that? 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 13, 2025 / 8:30AM, TISC.NS - Q4 2025 Tata Steel Ltd Earnings Call

Question: Ritesh Shah - Investec - Analyst : Sure. My second question is on the cost takeout. A couple of clarifications over here. In the prior call, we had indicated for Tata Steel Netherlands around EUR500 million number. In this presentation, we have given a number of INR4,000 crores. Is it the same number? Or is it a top up? I presume it's the same number, right?

Question: Ritesh Shah - Investec - Analyst : Okay. Specifically for UK, again, we have given a number of around INR3,000 crores. This effectively implies 36% of the cost base ex raw mat, which effectively could translate to nearly $100. What are the underlying variables that we are looking at over here? And is this an exit rate that you're looking for FY26?

Question: Ritesh Shah - Investec - Analyst : Sure. And I'll just squeeze in one, specifically on the cost takeout. So historically, we have seen, given disclosure on for the Indian operations, last one -- likewise, if you look at Tata Steel Europe, we had indicated cost transformation programs in year FY20, FY21, and FY24. I think the cumulative number is almost like $700 million plus. However, when we look at the implied cost, ex raw mat, ex power and fuel, we don't see the stickiness of the cost savings, be it for, be it for Tata Steel Europe. How to better understand or appreciate the stuff that you're doing? 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 13, 2025 / 8:30AM, TISC.NS - Q4 2025 Tata Steel Ltd Earnings Call

Question: Satyadeep Jain - Ambit Capital Pvt Ltd - Analyst : Just a follow-up on the cost takeouts. This question basically comes from the fact that Tata Steel has been around for decades. Now these inflationary -- anti-inflationary cost takeout that you are talking about, which are different from the earlier ones. What has led you to now look at these cost savings, which you were not -- the company had not seen before? Is it the prolonged downturn that maybe steelmakers like yourself are looking at -- maybe some takeouts which industry didn't look at earlier? And if that's the case, then I -- what is unique about the takeouts you are doing, 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 13, 2025 / 8:30AM, TISC.NS - Q4 2025 Tata Steel Ltd Earnings Call which if the entire industry, let's say, Chinese also and others look at improving coke rate because of the downturn, then everybody's cost goes down, then who's the beneficiaries? So I just wanted to understand what is unique to what Tata Steel is doing, what others might not be able to replicate? And why now, which -- why couldn't you do it earlier? .

Question: Satyadeep Jain - Ambit Capital Pvt Ltd - Analyst : Yeah. No, fair enough. I get the point. I think for us, we analysts, we're trying to figure out if everybody is trying to be the last man standing, the challenge is one year down the line, you -- everybody looks at cost, but EBITDA part doesn't change. That's the fundamental reality sometimes in the commodity business.

Question: Satyadeep Jain - Ambit Capital Pvt Ltd - Analyst : Just to put you on the spot -- last question from my side, just putting you on the spot, let's say, one year down the line, everything remains the same, we are here one year down the line in May 26, everything is the same, prices are the same, raw material prices, coal, power, should we be looking at EUR100 per tonne -- $100 per tonne EBITDA for Netherlands given the cost takeout, you're talking about, EUR500 million, which is about EUR70 per tonne and the price savings you're talking about in first? So everything remaining the same, you are saying we should be looking at EUR100 per tonne EBITDA for Netherlands in one?

Question: Amit Dixit - ICICI Securities Ltd - Analyst : So a couple of questions. The first one is more of a bookkeeping question. If you could let us know the volume guidance that India and consolidate for FY26.

Question: Amit Dixit - ICICI Securities Ltd - Analyst : And no additional volume from Ludhiana are included in the title? 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 13, 2025 / 8:30AM, TISC.NS - Q4 2025 Tata Steel Ltd Earnings Call

Question: Amit Dixit - ICICI Securities Ltd - Analyst : Great. The second question, again, I will move to the flavor of the call that you've caused. So in terms of cost, again, in Jamshedpur is one of the most efficient plant possible -- our India operations, I would say, one of the most efficient, not only in India, but the world. So just wanted to understand the INR4,000 crores that we have targeted for the year. First of all -- I mean, is there any tangible scope to reduce the cost further? And if so, where -- I mean, broad buckets, is it procurement? Is it supplier optimization? So just wanted to get my head around that. And considering that you achieved INR4,000 crores going down further, as you said, it's a continuous process, will there be further targets for Jamshedpur or India operations to reduce cost?

Question: Ashish Jain - Macquarie - Analyst : Sir, my first question is on infusion of $2.5 billion. So you gave some of the drivers of that infusion. But is this -- should we think that this is the final number given Netherlands will hopefully become self-sufficient from a cash flow point of view, UK cash flows should improve. So from a three, five-year perspective, which is the final support goes from India balance sheet to European operations? Or we could say...

Question: Ashish Jain - Macquarie - Analyst : Yes. I also had a question on cost. So to ask the way I'm thinking about it, if I look at our EBITDA for this year, consol, it is INR25,000 crores, by and large, right? And if I look at the last two years, each year, we have spoken about roughly INR6,000-odd crores of cost saving. So should we think that if not for these cost savings our EBITDA would have been like INR12,000 crores? Is that the way to think like? Is this cost really translating

Question: Ashish Jain - Macquarie - Analyst : Koushik, just one clarification. So this $2.5 billion incremental investment from India or some of it is already there and in the form of debt or something and will be converted to equity? Or it's totally --

Question: Ashish Jain - Macquarie - Analyst : Yes, yes, I understood. But from in the stand-alone balance sheet point of view, it is further money investment in the entity.

Question: Amit Murarka - Axis Capital Ltd. - Analyst : So I just wanted to get a sense now on expansion plans, I believe FY26 CapEx guided INR15,000 crores, which I understand it doesn't include any planned new expansion projects in India. So where do we stand on the NINL and KPO3 and such expansions, particularly in the context of 35 million to 40 million tonne capacity target we had given for FY30. 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 13, 2025 / 8:30AM, TISC.NS - Q4 2025 Tata Steel Ltd Earnings Call

Question: Amit Murarka - Axis Capital Ltd. - Analyst : And so is it fair to say about that probably it looks more like 30 million tonne then by FY30 rather than the earlier number of 35 to 40 that we were expecting? .

Question: Sumangal Nevatia - Kotak Securities Ltd - Analyst : First question is on the Europe operations. Is it possible to share and explain what is the impact of reduction in carbon allowances in FY26? And what would be the likely cost impact of that? 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 13, 2025 / 8:30AM, TISC.NS - Q4 2025 Tata Steel Ltd Earnings Call

Question: Sumangal Nevatia - Kotak Securities Ltd - Analyst : That's right. Yes.

Question: Sumangal Nevatia - Kotak Securities Ltd - Analyst : But Koushik, this carbon allowances will reduce along with CBAM, right? It comes...

Question: Sumangal Nevatia - Kotak Securities Ltd - Analyst : Understood. I have one question on the entire cost saving topic. So how is it expected to phase in FY26? Is it more of a gradual thing or back-ended? And as Naren mentioned, EUR70, EUR80 for Europe, given the INR4,000 crore number for India, keeping the spreads aside, can we expect INR1,500 to INR2,000 increase in the EBITDA on a per tonne basis?

Question: Sumangal Nevatia - Kotak Securities Ltd - Analyst : Yes. And just one last clarification. Given that today, I mean, there's a continuous pressure on Chinese steel prices, our calculations are suggesting our domestic prices at INR2,000, INR3,000 premium. So are we sensing a similar peakish kind of steel prices and some pressure going forward? I understand INR3,000 is what we are expecting in 1Q. But on a spot basis, what are your thoughts?