TATASTEEL - TATA STEEL LIMITED Share Price

Question 1: Can you provide your thoughts on the European steel industry regarding the October 7th protectionist measures and their impact on UK?

Answer: The new European measures are positive as they aim to reduce steel import quotas by 50% and impose duties on excess volumes, creating a more resilient steel sector. We anticipate improvements in pricing discussions for our Dutch operations starting in Q4. UK operations, unfortunately, are not benefiting from these actions, and we need support from the UK government to avoid further market pressures due to increased cheap imports.

Question 2: Will you reiterate your guidance for UK EBITDA breakeven by 4QFY26?

Answer: Without support from the government, reaching EBITDA breakeven by 4QFY26 will be challenging. If similar actions as taken in Europe occur, we could improve our standing, but current market conditions make it difficult, as costs currently exceed sustainable pricing.

Question 3: What is the timeline for Neelachal capacity expansion board approval?

Answer: Delay in Board approval is due to environmental clearances. We are actively processing approvals needed before presenting to the Board. We expect these to be finalized in the coming months before moving forward with final investment decisions.

Question 4: What are your cost and price expectations for the next quarter?

Answer: In India, we foresee realization about Rs 1,500 per ton lower than the prior quarter. In the Netherlands, forecast is about €30 per ton drop in Q3 compared to Q2, but we expect better Q4 results. For the UK, prices may stabilize but remain concerning due to low market pricing.

Question 5: Given overall market dynamics, should we expect loss amplification in the UK segment?

Answer: While losses in the UK are expected to be contained, improvements in market conditions could prevent worsening from Q2 to Q3. However, we face ongoing pressures from low pricing and increased imports.

Question 6: Can we expect Neelachal expansion to be completed in 3-3.5 years after board approval?

Answer: Yes, post-approval, we estimate a timeline of 3 to 3.5 years for completing Neelachal expansion, contingent upon necessary environmental clearances. Current capacities can also be slightly increased with clearances.

Question 7: Will you sustain existing capacity in the UK, or consider scaling back?

Answer: We are confident in maintaining the actual capacity; the real issue lies in import quotas remaining static despite declining domestic demand, which complicates our operations.

Question 8: How do you plan to secure iron ore for Indian assets?

Answer: We currently have substantial reserves and are exploring partnerships with OMC. We aren't limited to only captive sources; securing competitive pricing with flexible purchasing strategies is critical for our long-term sustainability.

Question 9: What is your outlook for domestic demand? Why are prices low despite strong demand projections?

Answer: Demand remains robust, with double-digit growth expected, but simultaneous increases in industry-wide capacity could create supply-side pressures, affecting pricing. We are cautious in pricing expectations for December and will monitor market responses.

Question 10: What is the anticipated profitability of the Ludhiana EAF compared to your current operations?

Answer: Profitability in Ludhiana will be lower, roughly around Rs 5,000-7,000 EBITDA per ton. However, initiatives to optimize logistics and reduce costs provide an opportunity to bridge some gaps in profitability.