Tata Steel Ltd (TATASTEEL) Q4 2026 Earnings Call Transcript

Note: This is a preliminary transcript and may contain inaccuracies. It will be updated with a final, fully-reviewed version soon.

Tata Steel Ltd (NSE: TATASTEEL) Q4 2026 Earnings Call dated May. 16, 2026

Corporate Participants:

Samita Shah — Vice President, Corporate Finance, Treasury & Risk Management

T.V. Narendran — Managing Director and Chief Executive Officer

Koushik Chatterjee — Chief Financial Officer, Executive Director

Analysts:

Sumangal Nevatia — Analyst

Satyadeep Jain — Analyst

Unidentified Participant

Pallav Agarwal — Analyst

Ashish Kejriwal — Analyst

Pinakin Parekh — Analyst

Indrajit Agarwal — Analyst

Presentation:

Operator

Ladies and gentlemen, good day and welcome to the Tata Steel Analyst call. Please note that this meeting is being recorded. All the attendees audio and video has been disabled from the backend and will be enabled subsequently. I I would now like to hand the conference over to Ms. Samita Shah. Thank you. And over to you Ma’. Am.

Samita Shah — Vice President, Corporate Finance, Treasury & Risk Management

Good afternoon everyone on this Saturday afternoon and welcome to our call to discuss our results for the fourth quarter and the full year financial year FY26. We have with us Mr. Narendran, our CEO and Managing Director and Mr. Chatterjee, our Executive Director and CFO. They will make a few opening comments and then we will take any questions you may have. As always, the discussion will be covered by the safe harbor clause on the first page of our presentation. I hope you had a chance to go through the presentation.

It was uploaded on our website yesterday. So with that I will request Nareen to make a few opening comments. Thank you.

T.V. Narendran — Managing Director and Chief Executive Officer

Thanks Samita and hello everyone. A few comments before I hand over to Kaushik. Tata Steel delivered a strong performance in FY26 with improved margins expanding across operating geographies despite subdued pricing and challenges during the year. The performance is a cumulative impact of multiple decisions and disciplined execution over the last few years and positions us well for the next phase of growth and value creation. India for us is a key anchor of our growth strategy with annual crude steel production and deliveries increasing 8% year on year to around 23 million tonnes and the successful ramp up of the 5 million tons per annum expansion at Kalinganagar alongside the commissioning of the downstream facilities reflects a value led growth strategy for India.

This is supported by a strong marketing network and deep customer engagement and we maximize deliveries to chosen segments and some segmental highlights are as follows. The automotive and special products business delivered best ever quarterly and annual volumes. Our continuous annealing and galvanizing line at Kalinganagar which is a state of the art facility secured over 25 new grade approvals across ultra high strength steels and coated products enabling customers to meet evolving safety and lightweighting requirements.

FY26 also marked a shift in our approach to customer relationship from engagement led initiatives to solution oriented partnerships anchored in innovation and AI led enablement. As a result, our branded and retail segment continued to scale and Tata Tiscon, a retail brand achieved the best of annual volumes while Tata Steelium, our cold rolled brand achieved robust growth in the volumes at on with a 28% year on year growth. Innovation continues to differentiate our construction solutions and help cater to complex project requirements.

We deployed the inquik modular bridge system at the Varanasi Ranchi Kolkata expressway in just 24 days and introduced a first of its kind mobile board pile cage solution and significantly enhancing on site efficiency in discerning segments. We strengthened our presence in shipbuilding in oil and gas aided by international certifications that enable us to participate in higher specification and globally competitive orders with stringent quality and reliability requirements. Our downstream businesses including tubes, wires and colors achieved the best of our sales while Tinplate achieved record annual sales of the Paxil edible oil cans.

We remain committed to our India growth agenda with continued investments across capacity, downstream integration and sustainable steel making. During the year we commissioned our scrap based 0.75 million ton electric arc furnace at Ludhiana and progress continues on the proposed expansion at Nilachal which will support the next phase of value accretive growth in UK annual delivery delivery stood at 2.2 million tonnes reflecting subdued demand dynamics and we welcome the recently announced revisions to safeguard measures including 60% reduction in tariff free quotas and higher duties which are expected to support a more balanced market environment.

Continued and calibrated policy support will be critical to enable a sustained recovery in the market. In Netherlands the liquid steel production was broadly stable at 6.7 million tons while deliveries were 6.1 million tons. Policy measures including tighter safeguards effective from 1 July and the ongoing implementation of CEBAM are reshaping trade flows and enabling preference for local supply. Recently our operations had been impacted by temporary suspension of the direct steel plant at Imoden for following emission observations.

However, we have now resolved the issue and the plant is expected to restart soon with due regulatory clearance. Separately, we continue to deeply engage with the province and the environmental regulators on emissions compliance at a coke and gas production facilities and the future of these facilities. I must emphasize that the company has undertaken several measures in the last two years to enhance its environment standards in the coke and gas plants and given the age of these plants, we are now considering closure of these plants.

In the future. However, any decision on closure of these plants will have to be done in a safe, planned and controlled manner. Finally, the developments in West Asia have increased costs and supply chain risk around energy freight and some raw materials. In the near term, improved pricing trends across India, Netherlands and UK should help absorb these cost pressures. In India upstream are largely operational, though there are some impact on a downstream galvanizing tin plate and color coded lines because of the shortage of some critical inputs like propane.

We are actively trying to mitigate this and most of the lines are now back in full operation we continue to monitor the evolving situation closely with a close eye on the demand dynamics. With that I will now hand over to Kaushik for his comments. Thank you.

Koushik Chatterjee — Chief Financial Officer, Executive Director

Thank you Naren. Good afternoon or good evening to all those who have joined in. In recent years the global markets have been continuously being reshaped by repeated disruptions including the pandemic, the the geopolitical tensions, supply chain dislocations and evolving regulatory frameworks. Together these factors have led to a very highly uncertain and volatile operating environment especially for the long and complex industries like steel. In the quarter ended March 2026 and for the financial year 2526, Tata Steel has delivered a resilient and consistent performance through a series of deliberate value accretive actions across our portfolio to navigate multi year trough in steel prices while managing unprecedented levels of uncertainty.

I will today talk on three areas. Firstly on the performance management, secondly on balance sheet and and thirdly on some recent developments in Netherlands and the UK. Firstly on performance. The financial year 2526 was challenging on one hand but represent the continuation of a strategic journey and in many ways is a precursor to also what lies ahead. The focus is clearly on the quality of earnings. Our consolidated EBITDA increased by 35% year on year from 25,802 in the full year ended March 25 to 34,800,848 crores in the full year ended March 26.

The consolidated EBITDA margin expanded by 320 basis points from 12% to 15%. Our full year performance demonstrates the impact of the cost transformation program which has achieved about 10,868 crores across of savings across geographies. India delivered the cost transformation benefits of Rupees 3927 crores. Key cost efficiencies were driven by purchase, optimization of spares, reduced refractory consumption, increased use of coastal waterways which offer a structural cost advantage over other modes of transport, higher power wheeling and leaner coal mix.

UK achieved a cost benefit of about 1958 crores driven by calibrated and focused spending on maintenance cost and maintenance management, stronger spares management discipline and insourcing of product testing. Netherlands delivered benefits of about 4,983 crores via optimization of cold blend leading to decline in procurement cost and deployment and deployed value in use concept to improve operating efficiencies such as foil rate, scrap consumption etc. In terms of execution the cost transformation program has achieved about 95% compliance to the stated plan of about 11,500 crores.

The key variation to the 100% compliance was a delay in TAR Steel Netherlands restructuring which has since been completed. In financial year 2027. We are aiming to achieve additional cost transformation savings of about 7100 crores versus the FY26 level. We have also enhanced in the last financial year our working capital efficiency and released around 6,000 crores of cash during the year, especially in India and Netherlands through very focused management of working capital. Let me now speak on the India business as it continues to be our core growth engine and our anchor in terms of the future strategy of Tata Steel.

India now contributes about 74% of Tata Steel’s total crude steel production. At a geographical level, India continues with its industry leading performance with EBITDA margin growing at about 17% year on year to 34,000 to 72 crores. The EBITDA margin was about 24% and similar to the 10 year average. Even in a challenging year. Our performance in UK and Netherlands have also improved materially on a year on year basis. UK losses have now narrowed to about 168 million to negative 217 million while Netherlands EBITDA almost tripled to 267 million.

Combined, the UK and Netherlands EBITDA turned positive for the financial year 2526. Secondly, our performance also demonstrate the cash flow orientation of the entire company. Operating cash flow before capex and dividend increased from 17,007 700 crores in the previous year to 29,254 crores in financial year 26 and free cash flows of 10,738 crores which were significantly higher compared to the previous year. Our capacity expansion in India in phase two of Kalinganagar is now complete and this is being complemented by focused investment in downstream facilities and portfolio simplification, strengthening our product mix and enhancing our margin profile.

We continue to focus on growing the India business, some of which we had discussed in our earlier calls. Moving to the fourth quarter performance provided on slide 28 of the presentation, our consolidated revenue stood at about 63,270 crores and EBITDA was 9,953 crores translating to an EBITDA margin on a consolidated basis to 16%. Higher realizations and improved volumes in India were complemented by savings on account of cost transformation. Tata Steel standalone revenues for the quarter at about 38,448 crores and EBITDA was 9,439 crores on a per ton basis.

The EBITDA witnessed a sequential improvement of 2,100 rupees per ton primarily driven by the higher volumes and steel realizations. Our Wholly owned subsidiary Nilachalispat recorded 402 crores of EBITDA up 15% quarter on quarter and reflecting an EBITDA margin of 27%. We have received the Board approval to merge NINL with Tata Steel subject to necessary approvals and and permissions and we are looking to complete the transaction in financial year 2027. Moving to UK steel prices remain below 500 pounds per ton until the end of February.

Since then, with the onset of the West Asia conflict, along with the UK Government announcing indicating announcements indicating higher and tighter steel safeguard measures have driven a meaningful uplift in hot rolled coal prices. During the January 26 quarter tar steel UK EBITDA improved by 15 million pounds to negative 48 million pounds. Most of the recent spot price improvement is expected to flow through the p L in Q1 and Q2 of FY27. In the UK steel safeguard measures that were originally introduced to support the domestic production are set to expire on 30 June 2026.

We welcome the proposed new trade framework and will continue to engage constructively with the Government on areas that require further refinement. Effective 1 July 2026 the revised safeguard regime proposes a 60% reduction in the import quotas alongside an increase in the tariff from 25% to 50% with the objective of ensuring that 40 to 50% of the steel demand in the UK is met from domestic production. For our UK operation this represents a very meaningful step. Over the last two years we have reduced fixed costs by about 50% from a base of approximately approximately 1 billion in FY 2024.

However, weak demand conditions and the influx of low cost imports have continued to weigh on performance with EBITDA losses of around 98 pounds per ton. The revised framework therefore has the potential to materially improve the operating conditions and performance. With price increases coming through in Q1, we expect quarter on quarter improvement in the earnings going forward. In the UK the work is progressing on the 3 million ton electric arc furnace in Port Talbot. Major demolition work has been completed and securing access to high power electricity is critical for our planned transition.

While we are working with the Electricity system operator and the National Grid for new electrical infrastructure, National Grid has formally alerted us that their connectivity project is delayed. This is critical for Tata Steel UK for the project commissioning and we are in conversation with national grid and the UK government on resolution of the issues. In Netherlands the fourth quarter EBITDA at about 58 million translates to about €34 per ton. Higher volumes and improvement in costs were mostly offset by a drop in realization on a quarter on quarter basis.

As in the past years a lot of focus in Netherlands has been on cash flow management and the company continues to perform exceedingly well on the cash flow management and is effectively net debt free in spite of very challenging operating and regulatory conditions. Let me now come to the balance sheet. Our priority is to keep the balance sheet strong and robust. Post pandemic we prioritize deleveraging in FY21 and 22 and reduce debt by about 40,000 crores including prepayment of about $3.6 billion of offshore obligation.

Gross debt currently stands at about 92,382 crores and the net debt at about 80,100 crores. For the last few years we have been focusing on onshoring of overseas debt to mitigate the rupee depreciation risks. This has certainly been very beneficial, particularly in the last year. If we did not proactively undertaken the onshoring, gross debt would have been significantly higher by about 12,500 crores on account of INR depreciation alone. The equity stake in acquisitions that you often see in the disclosures in Tata Steel holding actually relates to this onshoring initiative.

As a result, the overseas debt has come down from about 50% to the total debt in 2021 to 18% of the total debt in 2526 by FY28 it will go down further when our overseas dollar bonds are repaid. The only overseas debt that will remain is the working capital line for our overseas businesses. I would also like to mention since all of you keep asking me about deleveraging. In the last 12 months we have actually prepaid around 9100 crores of debt from our internal cash during the year. You don’t see the same on the face of the financial statement because the overseas debt is now valued at 94 to a dollar versus 88 to a dollar a year back which accounts for about 4200 crores.

And there is increase in the leased asset which is about 2,500 crores. Hence you only see a 2100400 crores as the reduction on a net basis. Collectively these measures reinforce Tata Steel’s position as one of the few steel companies globally rated as an investment grade by international rating agencies. Our year in net debt to EBITDA has reduced to 2.3 times down by 1 ton compared to 3.3 times 2 years back during FY26 our total spend on capex was about 14,000 crores on a consolidated basis and we intend to increase the allocation in of the same in FY27 to around 20,000 crores of which more than 60% will be spent in India.

I would now like to explain a bit on what you would have seen in the press release and filing on the material uncertainty in TSN over the last two years. As Naren mentioned, a lot of work has been undertaken in the coke and gas plants and the company has resolved many issues raised by the environmental agencies. As he mentioned that many of the standard requirements are actually above the industry standards and some of them are technically not doable and not followed anywhere else in the world. After careful assessment, we have agreed therefore to close down the CGP’s in a planned, controlled and a safe manner in the future.

We are currently in discussion with the province and the environmental agencies on the timeline that ensures a controlled and a safe closure in sequence in the future. As mentioned in the filing, we have received a letter post the balance sheet date from the local environmental agencies regarding their intent to revoke permits without any specifics. This causes the material uncertainty element for Tata Steel Netherlands while preparing the basis for the financial statements. Additionally, the local regulatory environment is evolving with authorities proposing standards that go beyond sometimes the EU norms and global practices.

Notwithstanding these challenges, we are committed to operating in a safe, compliant and environmentally sustainable manner and we are deeply engaged with the environmental agency, the provincial leadership and the government for a mutually accepted resolution with respect to decarbonization of our steelmaking facilities in Netherlands. We continue to remain engaged with relevant authorities on the transition roadmap. Lastly, on the ongoing crisis in West Asia. As Naren has already mentioned, it has some implication on the cost side on our near term performance.

While our upstream operations, that is the crude steel production, has remained largely unaffected, the the downstream operations initially faced some supply chain constraints. As he mentioned on propane, we managed to mitigate the impact via a range of initiatives including alternate fuel shipping routes and preponding shutdowns. In some cases, costs remain a focus area. However, we will continue our cost transformation program in financial year 27 where we expect these initiatives to mitigate a certain proportion of the pressures.

Before I close, I am happy to share that the Board of Directors has proposed a dividend of 4 rupees per share for fully paid shares of face value of one each. With that, I’ll end my comments and open the floor for questions. Thank you so much

Questions and Answers:

Operator

Thank you sir. We will now begin with the question and answer session. We will be taking questions on audio and chat. To join the audio questions queue, please mention your full name and email ID in the chat box. Kindly stick to a maximum of two questions per participant and rejoin the queue. Should you have a follow up question, we will unmute your mic so that you can ask your question. To ask questions on chat, please type in your question along with your full name and email ID in the chat box.

We will wait for the moment as the queue assembles. The first question for today is from Sumangal Nevatia of Kotak Securities. Sumangal, please go ahead and ask your question.

Sumangal Nevatia

Thanks for the chance. Firstly, on the topic of the closure of coke and gas plants, just want to understand if we replace this with the market purchase, what is the cost impact? And then a broader question. Given so much regulatory uncertainty in the region and constant surprises, is there a case to revisit our entire investment plan in the region?

T.V. Narendran

Yeah, Kaushik, You’re on mute. Kaushik.

Koushik Chatterjee

Sorry Sumangal. So to your question on the cost penalty, so to speak, on buying of Coke. I think given the fact that we are still assessing as far as the timing is concerned, there will be a impact because we will not have the gases in particular and the credits that go into coke making. But other than that we are also looking at options to supply from various sources which could also include India. We will have some time to plan for it. That’s what our base case assumption is. And that’s why we are deeply engaged with the, with the government, the provincial and the regulator on the second issue of the case for reinvestment.

Actually some of these are prerequisites to be resolved before we undertake any large investments. So while the point is very valid, I think that’s precisely the conversation that we are having at this point of time with the various stakeholders. And it’s not that the coke and gas plant shutdown affects the plant or the volumes as such because there are alternative ways to do that. But to look at the future and the new configuration of assets to invest, we need to resolve some of these issues before we take on any large commitments.

Sumangal Nevatia

Okay. Okay, I missed the early part. So we are saying that there’s not much cost impact. As for us,

Koushik Chatterjee

No, I’m saying there is a cost impact but there is also an offsetting impact that is possible.

Sumangal Nevatia

Okay. Especially because

Koushik Chatterjee

The CO2 will go down. As I said, there are the pluses and minuses, the negatives of the. The fact that the, the coke gas, coke oven gas which is used for as an energy source will not be there. There will be a freight which will be incurred for bringing in the coke on the other end. The CO2 will go down. So there is a net impact. It also depends on at what time this transition happens.

Sumangal Nevatia

Got it, got it. And with respect to the delay in, in the electrical backup and infrastructure for uk, what sort of delays are we seeing and what is the best case estimate for commissioning of that plant?

Koushik Chatterjee

So that is again being discussed and I think we have just been formally being told that there is a delay. We are working with the UK government and the National Grid and ESO, which is this electricity supplier to see if we can mitigate but somewhat between say six months to eight months will certainly be there, maybe higher after we have built the plant. So the initial estimate was somewhere around 18 months. It has come down to 12 months and we are actively working to see if we can reduce it further but there will be some delays imminent.

Sumangal Nevatia

Okay understand my second question is with respect to NINL expansion. So we’ve not yet heard any progress on, on the exact timelines and capex. So any update on that? And generally if you’re seeing a lot of players adding capacity aggressively, looks like at least from the math that we might lose market share over next five, seven years. So is, is this a concern for us and any shift or change of expansion pace for us that we can expect.

T.V. Narendran

Yeah, so yeah Kaushik, you want to give indication on the 9L timelines and then I’ll address the second part. Yeah.

Koushik Chatterjee

So ninl so mangal work, initial work on the site preparation has already started. We are getting permissions on different parts and the FEL3 which is our basis for making the final allocation of capital is also very advanced. So in the next few months we should be able to announce that. One of the reason is that there is a lot of work that needs to be done on the site because this is going to be a 10 million ton site. So we are careful from a regulatory point of view to get all the approvals so that we can do it and equally be tight on the CapEx.

So we are fairly advanced in that we’ll take a few months and come back and announce and that is then going to ensure that we can execute it quickly. So that’s as far as the NI is concerned.

T.V. Narendran

You know Sumangal, on the market share question, you know the key point is market share and what. Because the way we are looking at it is we are More interested in market share in key segments, attractive segments. And we want to make sure that our market share in the segments that we target, or the attractive segments as we call it, is at least twice our overall market share. That’s why our focus a lot more on downstream, a lot more on value added products, solutions, etc. So while we have the optionality to grow the upstream, I think even with the existing sites between Kalinganagar, miramandali and nilachal, plus jamshedpur at 11 million tons, we already have the optionality to grow to 45 to 50 million tons in India once we start.

The Maharashtra site, which was also announced, that potentially adds another 6 to 10 million tons. So that optionality is available for Tata Steel, which was not there 10 years back when we were operating largely out of Jamshedpur. The question is how fast do we want to build and where, based on the demand, based on the balance sheet and many other things. But what we are very clear is in the market segments that we are strong in which we think are very important, like automotive, oil and gas, the retail franchise that we have, we will continue to be the dominant player, the number one player in all these segments.

Sumangal Nevatia

Understand? I’ll fall back in the queue. Thank you and all the best.

Operator

Thank you, sir. The next question is from Satya Deep Jain of Ambit Capital. Satya Deep, please go ahead.

Satyadeep Jain

Hi. Am I audible?

Operator

Yeah,

Satyadeep Jain

Just wanted to understand to the previous question. So you mentioned that Coca one is going to be Coke. You may buy from India or somewhere else. Just trying to understand because the auditors have flagged the material concern to going concern. So it seems like it’s not just oak. If you can just get Coke from India, why flag material risk to going concern? Because we understand some rolling and casting facilities have also been shut down. So can you clarify and in case we shut down these facilities for five years before, let’s say BRI comes, then what do you do with the labor there?

T.V. Narendran

Yeah,

Koushik Chatterjee

So I think the first. Let me deal with the auditor’s question which I thought I’d explain because in the, in the letter that they have issued, which. So we were, we are in discussion with all of the stakeholders in a very deep, almost on a daily basis, engagement by our colleagues in Netherlands. So the letter which had come in did not have any definitive pathway dates or transition specifics. So which actually from if you are an auditor, you, or if you are even the company, you will actually ensure that these specifics are necessary to get into the next level of planning and creating the investments, etc.

So when a letter comes in, the auditors are naturally going to say that there is no way in which a specific date is mentioned or a year is mentioned. And that actually creates the uncertainty. And that is what has been used, saying we have, the company is in receipt of a letter. First of all, the coke ovens cannot be shut down in any unplanned manner. As I have said in the past to some of you that a coke ovens is more like a chemical factory than a steel factory. The coke ovens in UK was the last major facility to shut down because it cools down on its own.

You have to give time. There is a makeshift requirement, there is also a permit requirement to undertake a shutdown. So if all of these is a sequential way of shutting down in a planned, controlled, safe manner, if a letter lands up, which basically does not articulate that path, then it creates an uncertainty because that uncertainty is an unhandleable uncertainty. And that’s why that is being flagged off here. I share your concern and that is also our concern in some ways, because that is precisely what we want to do.

The cocoons are 40, 50 years old. So and the standard, some of them, for the design of the cocoons is not technically feasible also. So we said we will shut down. We were anyway to shut down soon after the first phase of the DRI EF would have come out. This is now potentially earlier than that. And that gap, or the transit gap, intermittent gap would have been filled by purchase of Coke, which I think is perfectly fine. There will be cost penalties, but as I said, there are CO2 benefits which will also come in.

There will be a net effect out of that. But this is more about the physicality, not about the financials. And that is what created the material uncertainty. We hope that this will get resolved in the coming months as we are engaged with the government. And everybody sees the logic of doing it safe because we can’t shut down in an unsafe manner, because then it will be. The regulator will be responsible, not Artistic Netherlands. So these are the kind of things that we are working on. And that’s the basis on which the, the auditors have said that TSN is prepared on a going concern, but there is material uncertainty given this letter.

So the cause of the material uncertainty is only this letter, it’s nothing else. And that is something that needs to be understood.

T.V. Narendran

The dsp. The DSP is subject to slightly different. So there were some emissions from the DSP which exceeded the limits. So we had, you know, in, in the interest of due transparency with the regulator declared it to them jointly. It was looked at. We’ve closed the dsp, some changes have been made, some trials are being run and we hope the DSP should be back up with if you have all the requisite approvals later this month. So that’s on the DSP side. I think the other question that you said, yes obviously if you shut down facilities that will have an impact on labor in those facilities etc.

So the that’s why this whole transition needs to be planned well and that has been our submission to the regulators as well because some parts of the site will then be shutting down earlier than what was originally planned. So the transition will happen, you know, firstly as Kaushik said, once we are clear that we have a social license to operate going forward as well and then you know, whenever we are ready with the investments.

Koushik Chatterjee

So just to add to what Narendra said that if there is any permanent shutdown of any facility the people will have to be restructured in in. So that is given it’s not that and that’s what we have done in the UK also. So that is something that will is an inevitable consequence of shutdown whether it’s planned or unplanned. In case of unplanned it becomes a lot more complex to handle.

Satyadeep Jain

Secondly, on the transition to dri so while you’re saying that you will have an agreement with the government just in the context of when this entire investment was made by Korus also back in the the regulatory landscape changed over time. This entire permit, the ability to revive permit came a few years ago much after the initial investment. So how do you grandfather looking at the regulatory landscape can change later on also after you make the investment. And so while you evaluate all of this in case there is a plan to not go ahead with this investment, does it mean you accelerate India investment and why not explore global majors for tie ups like some other players are doing?

Is that something you have explored to accelerate expansion in India? So that’s the other question. Yeah.

T.V. Narendran

So let me put it this way. I don’t think the India growth is being held back because of anything that we do in Europe, if at all. You know, we’ve done what we wanted to do in India. That is one comment. The second comment I want to make is in our view we felt that it’s better for us to go ourselves. We have had joint ventures in the past. We still have a joint venture with Nip and Steel for a continuous annealing line. We had a Joint venture with Bluescope for the color coding line. So we believe that in a home market we should ideally be by ourselves because this is our core market.

This is where our strength is, this is where we have a strong franchise. And hence we actually want to build capacities by ourselves in India. So that’s our view, at least based on what we’ve seen so far. Kaushik, you want to add?

Koushik Chatterjee

Yeah, I just wanted to say that actually we think there is power in consolidation. And in fact we are buying out our JV partners in India because the synergies that we see in the marketplace, in the manufacturing excellence supply chain actually makes us very clear that if you have to leverage the power of size, it has to be consolidated rather than fragmented. And therefore we think that it is important for us to have one large way of moving forward. As I, as I told you that we are merging now ninl, we bought over colors, we are buying out many of our JV partners across the value chain because that gives the leverage and the power to be more stronger in the market.

And I think as Naren mentioned, I must re emphasize that the India growth is not impacted by what is happening or not happening in the rest of the portfolio.

Satyadeep Jain

And what about change in regulatory landscape in Netherlands? Let’s say, how do you grandfather.

Koushik Chatterjee

No. So I think that’s a good question and an important question. So the joint letter of intent had a few condition precedents on both sides. There are condition precedents with the government has to fulfill and the condition procedure that we have to fulfill. Some of the condition precedents also require the regulator to also fulfill because they are also a party in some way. Province is a party in, in the, in the jailoy. Before we get into anything which is binding, a lot of this has to be contractually agreed.

And we are not there at this point of time because no investor, including us, will make an investment unless it is not just grandfathered. It is contractually guaranteed to run its course across a certain minimum period of the life cycle by which the recovery of the investment happens. And in all of this, even the government is an investor. So I think that is even more important. So I think we are not there at as yet. As far as the FID is concerned, these are the preconditions that we need to resolve before we get there.

The JLOI is a joint letter of intent is live and active. We are in active conversation. But these are very important things because end of the day it will be also, even after contractually there will be a certain judgment to be taken on how this works. So we are not there at this point of time. And the regulatory landscape is certainly a very important fulcrum which needs to be assessed every time we move one step further. So that is also getting registered in our, in our process to see as to what are the pros and cons, what is tolerable, what is not tolerable, etc, so we are not in that zone.

We will have to do that work as we discuss with the regulator, understand the planned way of doing it because we are also very conscious, apart from our own money, we will not take public money to make investment which are at risk.

Operator

Thank you sir. The next question is from Alok Devra of Motilal Oswal Alok, please go ahead

Unidentified Participant

And congratulations on good numbers. Just had a couple of questions. First is on the nsr. So we saw good improvement in the fourth quarter. So if you could just highlight what’s the pricing been in April and May and what we could expect in the near terms in terms of the realizations. And second on the coal cost, what’s the coal consumption cost for 4Q and what we could look at in the first quarter?

T.V. Narendran

Yeah. So as far as realizations are concerned, in India we expect Q1 to be about 6,000 rupees higher than Q4. In UK we expect it to be about 80 pounds higher in Q1 compared to Q4 and in Netherlands we expect it to be again about €80 higher in Q1 compared to Q4. In terms of coal, I’ll give you the coal consumption increase, the delta increase we expect in Q1 for India over Q4 is $15 per ton and in Netherlands is about $10 a ton. As you know, in UK we don’t buy coal and the iron ore increase in Netherlands is expected to be about $5 per ton, Q1 over Q4.

But I just want to add here that some of this suggests that the spreads are going to increase significantly. There will be an improvement in spread certainly in India, but there are many other costs which are coming in beyond coal and iron ore because of the impact of West Asia as Kaushik mentioned. So some of that will add to the cost. But overall, yes, we expect margin expansion in India and in UK and some margin compression in UK because I mean in Netherlands because of the issues that we’ve had with the DSP and we would have lost almost one and a half months of production.

Unidentified Participant

Sure. So the other cost which you mentioned for India in the, in the first quarter, how much that could be in per ton basis?

T.V. Narendran

Samita you want to

Koushik Chatterjee

Let that water finish before because. Sure. We don’t want to give you something and then come out with something else.

Unidentified Participant

Sure. And also if you could just highlight some bits on the India demand because we are seeing some of the competitors also adding rather increasing their capex, you know, guidance for this year, next year like big numbers are coming out. So what’s your view on the India demand over the next two to three years? If you could just pull through some color on that. Thanks.

T.V. Narendran

So the India demand is expected to be strong. You know, I think you know the. As long as there is infrastructure led growth. Right. So I think that’s a big assumption and hopefully the current macroeconomic situation will not provoke a rethink on the spend on infrastructure because that’s a big part of India’s steel demand growth. Because it’s been more investment led growth rather than consumption led growth. It’s been more infrastructure led growth than consumption led growth. And if that continues, then obviously the demand growth on steel will be greater than the GDP growth rate.

So we are, I mean till two months back we were expecting at least 8 to 10% growth in steel demand going forward. Now as a GDP, if you’re going to recalibrate the GDP and say the GDP will grow a bit less, the steel demand may grow a bit less. I think the automotive sector is quite strong, continues to be strong. We need to see the impact of rising fuel prices, particularly on commercial vehicles. But I think passenger vehicles are strong, two wheelers are strong. Construction, a bit of a slowdown, a bit of an impact of labor not being there.

I do see some pain with the MSMEs as well because there is pressure at the end of the value chain. Some of them are also struggling with a little bit of working capital issues, etc. So I think so far it’s good. It looks positive but obviously it’s not insulated totally from what’s happening around the world.

Unidentified Participant

Sure, yeah. That’s all from my side. Thank you and all the best.

T.V. Narendran

Thanks.

Operator

The next question is from Pallav Agarwal of Antique Palav. Please go ahead.

Pallav Agarwal

Given that we have only the EF coming on stream. Hello, can you

Unidentified Participant

Speak up? We can’t hear you very well.

Ashish Kejriwal

Is

Pallav Agarwal

This better now, sir?

Unidentified Participant

Yeah, that’s it.

Pallav Agarwal

Yeah. Okay, so first question was on the volume guidance for 27, you know, given that we only have the EF coming on stream, will there be any debottlenecking at Jamshedpur which can add to the volumes?

T.V. Narendran

The volume will be at least 2 million tons. Better in this financial year compared to the previous financial year with most of it coming in India. And largely because the Kalinganagar ramp up is pretty much complete. So that’s the delta volume. In fact, Ludhiana is only half a million tons in this. So we’ve not taken the full Ludhiana volume because it’s still being ramped up, but you will have pretty much the full Kalinganagar volume. So we expect it to be 2 million tons plus for next financial year compared to, or rather this financial year compared to the previous financial year.

Pallav Agarwal

Sure. But the Ludhiana profitability would be lower than the other. The general last one is profitability.

T.V. Narendran

Yeah, it will be lower, but you know, the whole model is different. The profitability there from a conversion point of view will be lower. But you’re going to save about 3,000 rupees of transportation cost because otherwise that same steel we would have spend 3000 rupees moving it from Jamshedpur to Ludhiana. So you will save that. So when you look at it from a price minus transportation cost point of view, you’ll have a higher price there. So the cost may be higher than making steel out of iron ore and coal.

But your realization if you net it off rate will also be higher compared to what we would have shipped it from here. Secondly, we are less insulated by the weakening rupee and also the coal prices, etc. Etc. So some of the cost increases that we will face. When you’re importing coal, paying for freight, buying in dollars, the Ludhiana plant is insulated from all that because you’re using scrap.

Samita Shah

And if I could add pallav, if carbon taxes come in, then obviously that adjustment will also happen because it’s as you know, it’s far more carbon. Eff.

Pallav Agarwal

Sure. Also just on the, on the value added proportion going up. So how much of a potential ebitda, you know, per ton can that add? You know, increasing the proportion of steel pipes or you know, other VAP products in the mix.

T.V. Narendran

Yeah. So typically our downstream businesses, even if you take the steel being transferred to them at market prices, add anything from 5 to 10% EBITDA. Okay. So that’s the incremental EBITDA you will get from the downstream businesses. Even if you transfer steel at market prices. That’s why we’ve always had downstream. We are planning to grow it. The tubes business, which is now million tons, 1.2 million tons, we want to take it to about 4 million tons. The wires business, where we are the fourth or fifth largest in the world is close to a million tons.

I mean it’s about 6, 700,000 tons. We want to take it to a million tons. The packaging business actually between Europe and India we are one of the largest in the world. Again we want to double the India capacity which we’ve already announced last year. Then we also have colors. We feel that we can do much more in color coated steels. We were in some sense limited by the JV and that’s why we bought out Bluescope Share and we plan to double the size of the colors business also in the next 12 to 24 months.

So I think we want our downstream businesses to maybe at least be about 50 to 60% of our volume. The whole objective is to sell less HR in the market and sell more value added products. Because selling HR you are always under pressure on prices, international prices, it’s a commodity you’re sending to the, selling to the tube makers, etc. Etc. Whereas we feel with less HR in the mix, more cold rolled, more galvanized, more packaging steel, more value added products in our mix, we would be better equipped to deal with the cyclicality which is inherent in the business.

Demand is always there. But the question is the profitability that you need to protect.

Pallav Agarwal

Sure sir. So lastly, like any plans on monetizing, you know, online platform which I think is doing fairly well. So yeah, is that something that we can

T.V. Narendran

Not, not monetizing it as in nothing, no plans just yet to spin it off and you know, monetizer value. But yes, this is a very important part of a route to market. As you saw the gmv, I mean we have the retail business, GMV growing very fast and this is again being sold with no discounts at the same EBITDA margin that you see in the rest of Tata Steel. And this is almost 5000 crores now. And then you have the. We have what we call Digica which is for the SME business which is also growing. Well just now we are focused on selling what we produce.

It’s more about enhancing our reach, particularly in the retail business. Now we have orders coming from Indians living across the world who are doing some construction in India, maybe building homes or buying steel for their parents or relatives who are building homes. So we get orders from all over the world now. So we see it as a platform to access customers who we didn’t have access to earlier. So we are focused on building it as a very important channel and route to market for ourselves.

Pallav Agarwal

Sure sir. Thank you so much.

T.V. Narendran

Thanks.

Operator

The next question is from Pinakin Parik of HSBC Pinakin, please go ahead.

Pinakin Parekh

Yeah, thank you very much. So my first question is on the Netherlands and the entire Saga on the CGP. Now when we go back to the UK operations, we have seen EBITDA losses of 13,000 crores over the last three years. Now at this point of time, given the entire uncertainty opportunity that we are seeing in Netherlands, first of all, what would be the immediate cost impact because of buying coke or gas from the plant? How will the profitability be impacted? Second, what would the if there are closures happen earlier in the next 12, 18 months, is there a possibility that the Netherland operations become loss making at current steel prices and current cost structure?

T.V. Narendran

So let me address that and then Kaushi can add to it. See, as I’ve said before, with the exception of maybe one year, two years, which is two, three years back when we did the blast furnace realigning, every year in the last 18 years the Netherlands business has been EBITDA positive and cash positive. That’s why as Kaushik said earlier, it’s debt free even today. So going forward, if the CO commons close, we expect it to continue to be EBITDA positive. Maybe making less EBITDA than we had hoped we would make, but it will always be EBITDA positive.

And so far the Netherlands operation has operated without any support from India. So I think we expect that to continue. I think this whole material uncertainty issue, as Kaushik said, was because the letter did not give any time lag. And it is like saying that if you don’t have a plan closure then there is a material uncertainty to some assets on that side. I think that is largely the messaging. So the business going forward will continue to be EBITDA positive. The other thing is obviously, as you’ve seen in the last few months and going forward we expect steel prices in Europe to be closer to the steel prices in the us.

It was traditionally closer to the steel prices in the us but over the last two, three years the gap had widened and that gap is closing now because Europe is also putting restrictions on movement of steel into India, whether through quotas or through CBAM and everything else. So we expect the pricing to be better in Europe going forward. We expect our Dutch operation to continue to operate on EBITDA positive basis even if the CO governs are closed. And obviously there will be some margin compression, but we expect them to take care of themselves.

The key question is the investments in the future and whether we have the social license to operate for that. And that is a question. That’s a point which Kaushik made earlier. Those decisions will be taken once we are comfortable that we have a social license to operate for the future, as much as we are seeking one now. Kaushik, you want to add to that?

Koushik Chatterjee

No, I think broadly this the same. I think, Pinakin, the issue is always on the safe and orderly closure, which I think is also something that the regulators also want very clearly. So we will have to come to that. Once that happens, there are projects which are to be undertaken to segregate physically the CGPS or the coke and gas plant with the rest of the plant. So that will take time. And that is. That is the reason why we are saying safe and controlled closure. Once that happens, you have a new operating model where you will import the coke from outside, be it from India or elsewhere, and you run it on that basis.

But that will not make this site unviable. It can actually continue on this on the same basis. Whether it has the affordability to make a large investment to transit or not is a question that we are testing at this point of time. And apart from the affordability is obviously whether the goal post on regulatory standards, will it keep changing. If these two are satisfied, there is a path forward. If not, there is a alternative path forward too. So we are just now in that evaluation stage and exploring as we are engaged very deeply.

It is a very serious issue as far as the new investment is concerned. And therefore all of this has to be resolved before any commitment for new investment is done by Tata Scene Netherlands itself, or whether we will be looking to take the public money that the government has offered us.

Pinakin Parekh

Thank you. Just two more quick questions. The first is on uk, given that there is going to be a delay between the plant commissioning and the electricity infrastructure, how will the plant operate without the infrastructure and whether will it be EBITDA positive without the facility infrastructure? The second is in terms of Nilanchal, given that we are still in the process of getting all the approvals, what is the earliest estimate of the first deal?

T.V. Narendran

So, on the first one on uk, two things here. One is we hope to be EBITDA positive during this year now that the prices have started improving. And so that can continue till such time the EF starts. You know, we can continue to supply the slabs from here and continue to convert into steel. And we are, you know, now that the prices, the policy changes that we have sought have come, we are expecting the business itself to be EBITDA positive going forward. So that is One part. The second part is while, as Kaushik said, there is currently a visible delay of about 12 months on the electricity supply, what we are trying to see is to get at least some connection, one line as soon as the plant is ready so that we can do some, some trials, we can test out some of the equipment etc so that we don’t waste those, waste the time that we are waiting for the full electricity connection.

So, and then what we are planning to do is the ramp up that we had scheduled, you know, after the commissioning, we’re seeing how to compress that to make sure that we catch up on the project IRR that we had targeted. Right. So if we do the preparatory work before the full electricity connection is there, then we can hopefully do a quicker ramp up on Nilachal. Kaushik, you want to comment?

Koushik Chatterjee

Yeah. So just to add to what Naren mentioned on uk, so the currently we, till last year we’ve been sending about 1.2 million tons of slab to UK. We are increasing that from India, from Tata Steel Kalinganagar to about 1.8 if that is our target to increase. And there is a reason why I am saying this because we often look at the UK EBITDA as a standalone uk actually the portal, but facilities in UK is effectively now the fifth hot strip mill for Tata Steel. And if we actually look at what is the system EBITDA that we talk about, we make about say seven to eight thousand rupees per ton of EBITDA on the transfer of the slabs to Ukraine on a market basis.

And with the increase in prices we are seeing about four and a half thousand rupees per ton of EBITDA by UK itself on the volumes that we transfer. So on a system basis for the ones for the slabs going to the UK, we make as Tata Steel Consolidated, about 12,000 rupees per ton of EBITDA. So that model will continue till the EEF starts. And then as Nareen mentioned, that when the power lines get commissioned or activated, we will then do the initial hot trials and then move on to the part of using it.

So there is no point where we will not be having the power lines but we are going to have the ef. That is not going to happen on a full fledged basis. So just thought, I’ll clarify on ninl, I think between our July and September we should be able to start the get the FID. And once we get that FID the target date is somewhere around 2930.

Operator

Thank you sir. The next question is from Indrajit Agarwal of CLSA Indrajit. Please go ahead.

Indrajit Agarwal

Thank you for the chance. I have a couple of questions. First in of the 12,000 crore capex in India, can you split it by project? In which project? How much are we spending broadly?

Koushik Chatterjee

So I think Indijit, I think there is a. It’s very difficult to give offend those kind of numbers. But effectively there are certain downstream expansion projects that are going on. Be it the tin plate, wires etc. There is a TL HRPGL in Tarapur. Then there are. There is a cocoons project which is in Jamshedpur which is going on. There is a tail end of the payment that has to be done as far as Kalinganagar is concerned. And then there are the sustainable projects and there is some allocation for ninl.

So all of these make up for. And then. Sorry. Then there is also mining side. So all of that taking into account is 12,000 crores.

Indrajit Agarwal

Sure. Thank you. So if

Koushik Chatterjee

You are looking whether we have allocated money for NINL the answer is yes.

Indrajit Agarwal

That’s helpful. So after the 2 million 10 increase this year over the next 2, 3 years we will hardly have any volume growth in India. Is that understanding correct or what kind of volume growth can we have in India? Let’s say from FY27 to FY30.

T.V. Narendran

So there are two, three things here. One is of course once the EAF comes you can use those slabs to convert into finished products in India. And there are some projects that we are thinking of in terms of plate mill and various other downstream. That is one possibility. The other thing is more than the volume growth we’ll have a lot of value growth because of all the projects that Kaushik just mentioned. In terms of HRPG line which is a 0.8 million ton line. The tin plate capacity is another 0.34 million tons of capacity.

And the tubes and wires which we will be value adding during the time. So we will. You will see a higher percentage of downstream in our mix. The steel making may be close to where it is. Still the big volumes come up in Nilachal. We also plan that in the next year or so we will announce the next EF project. Maybe somewhere in the west, possibly in Maharashtra. And that is something also which will. Because that can be built like you saw in Ludhiana. We built that in two years. So that can come up quite fast.

Operator

Thank you sir. Before we take the next question I would like to remind the participants to please limit your audio question to two per participant. Should you have a follow up Question. You are requested to rejoin the queue or post it in the chat box. The next question is from Tarang Agrawal of Old Bridge Capital, Tarang. Please go ahead.

Unidentified Participant

Hi, good afternoon. Am I audible?

T.V. Narendran

Yes, please.

Unidentified Participant

Okay, so on the India business we see end use consumption in the retail sector sort of slowing down from what you’ve delivered over the past two years. It used to be about, my sense is 2.8 million tons about a couple of years back, then moved to 3.4 and about 3.5 million tons this year. And you know the construction and infrastructure sector, we actually saw degrowth in FY26. So. And while in your opening comments you did allude to Tiscon and Steelium achieving record volumes. So just wanted to get some clarification in terms of what’s happening in those end use sectors.

T.V. Narendran

Yeah. So you know, as far as disconnect is concerned, we sell Tata discount to projects and we sell Tata discount to retail. Okay. Retail for us is far more attractive than projects. So over the years we have increased or pretty much doubled our sales to retail which used to be at one point in time 100, 120,000 tonnes a month is today over 200,000 tons a month. So while the overall discount may not have grown, the mix has changed very significantly. And projects you would see the Tata discount to projects has come down because that’s a little bit more price driven market as far as telium is concerned.

A lot of the telium sales will also depend on further value addition options. As the galvanizing lines come up, which it has just come up in Kalinganagar we will have less cold roll to sell. So if you have cold rolled, we would rather sell it to auto because that gives us better realizations than to sell it to distribution or we sell it as galvanized which gives us better realizations than selling cold roll assets. So you will see this going up and down depending on what is the right product mix to sell.

So that’s maybe what you know, you’re seeing in the numbers but we can get back more specifically because I don’t remember the exact numbers at a product level.

Unidentified Participant

So. So just on Asiana. So is Asiana channel for the retail end use consumption?

T.V. Narendran

Yeah.

Unidentified Participant

Okay. So and yes, please go ahead.

T.V. Narendran

Yeah, so the customers who buy from on Asiana, individuals who, I mean the individual house builder is a target market for us as far as retail is concerned. That’s where we sell more than 200,000 tons of Tata. So it is an order generation platform. So people come on the platform place the order, the fulfillment is done by a physical distribution chain. So anywhere in India, I think within 72 hours or something, you place the order. You will get the steel through our dealer network which we have over 10,000 dealers now across the country.

Unidentified Participant

And this is exclusively only Tata products. Does it include Tata Pravesh as well or only steel?

T.V. Narendran

No, it includes steel Pravesh, tubes, wires, everything, all Tata Steel products. But I would say 90, 95% of the sale is Tata discount.

Unidentified Participant

Got it. Thank you.

Operator

Thank you sir. The next question is from Amit Dixit of Goldman Sachs. Amit, please go ahead.

Unidentified Participant

Audible.

T.V. Narendran

Yes please.

Unidentified Participant

Yeah, so two questions. One is on the capacity expansion plans. Now if you, if you look at your annual reports over last 5 years it has been vacillating between 35 to 40 billion tons of India capacity by FY40, sorry FY30. Now we have significant brownfield optionality, maybe more than our peers in India and we have got, I mean decades of experience. So why can’t we continue? I mean why can’t we have parallel expansions across our projects? Because brownfield expansion, replicating the similar furnace and of course you know, not ceding the market share to the peers.

Why are we not pursuing that? Balance sheet is in a Great state now. 2.3x net debt to EBITDA, 10,000 crores of free cash flow last year and India, you know, consumption expected to double by FY32. So just wanted to get your thoughts on that. I mean what is stopping us? Why are we being so circumspect about it?

T.V. Narendran

Sure. No thanks Amit. So yeah, you’re right. I think the optionality today is we can operate parallelly. Whereas like I said earlier when you had only one Jumpshedpur, you had to operate sequentially. And now you have and you’re Kalinganagar. You could operate parallel in two sites. Now we can operate parallel in four sites. Right. That optionality is there. So in some sense for us the nilachal expansion of 5 million tons, which is to go back to one of the other comments you made. The blast furnace will be an exact replica of the 5 million ton blast furnace that we have in Kalinganagar.

So we are replicating assets wherever we can. The steel mill shop will be different because it’s a long products plant and parallel we are working on the Bhushan one and a half million ton expansion which will take it to six and a half. There is a change in the way we do projects. Earlier we used to just announce a project and you know, then go around getting all the approvals. Now we announce the project only after we get all the approvals and we have an FEL3 level of detailing, so that then our ability to stick to the schedule and the cost is very high because we’ve gone with a great level of detail.

And I think that’s been a difference in approach than what we did traditionally. So that’s why you see the announcements happening only when we have all the approvals in place and we have an FEL3 level of readiness. And then once we announce it, then we can move much faster. Case in point is the Ludhiana project. I mean, we built it in two years because FEL3 level of detailing was done, all the approvals were in place. We announced the board approval about two years back. We were supposed to get it started in April this year, we started it in March.

And so we expect going forward, all the projects which Kaushik talked about, which as the HR galvanizing line, the tin plate line or the Combi mill that we recently commissioned, is a different approach. Compress the execution time and do it on time and schedule with no overruns, and do it when all your approvals are in place. So maybe that’s why you’re seeing us being a bit more circumspect, as you said. The other thing is, of course, like I said, strategically, we feel it is not just about steel making capacity.

Because let’s understand one thing, the cost of iron ore in India is going up. So the value pools will shift. Value pools are not necessarily upstream. Going forward, some of those value pools will shift downstream because for us, we’ve been buffered a bit because we’ve had our own iron ore. But if you generally look at cost of iron ore in India, it is really going up. Everyone is bidding over 100% to acquire the iron ore. Cost of coal will keep going up because India has no choice but to import a lot of coking coal.

And with the rupee where it is, so input cost for steel making is going to go up. So we need to be conscious of that. And that’s why we feel that we need to focus a lot more on the downstream than we’ve done. We probably have a good downstream presence compared to many of our peers, but we want to do even more. That’s why we feel that that is an area which we need to grow much faster than in upstream. And a lot of our focus on investments over the last year, whether it’s acquiring JV Partners, whether it is building new facilities, has Been on that.

The third thing is we want to strengthen our whole entire value chain and hence, as Kaushik just mentioned, even logistics, we are buying out some of our partners. We want to control the entire value chain which can help us in our competitiveness and things like that. So I think the way we deploy capital, the way we see the value etc may be different from the way some of our peers see it. But the best thing is we have the optionality, like I said, even with the current sides, we have the optionality to go to 45 to 50 million tonnes.

So it’s at some point in time if we say, hey, there’s still a lot of money upstream, even though the anode prices are high and everything else, you can always go there and do it. The other thing we need to keep in mind in India is the capacity to execute projects because you’re going to the same three or four people or maybe two, not even three to execute on the projects. So that’s also something, you know, do they have the capacity to execute? That we plan to do. And you don’t want to get stuck doing multiple projects which can’t happen as you plan.

So I think there are a number of ways to look at it and we believe having that optionality open with Brownfield, the cost of expansion will be lower. You can pace it better when you acquire like we did for Bhushan etc, you have a single bullet of 35,000 crores going in and your balance sheet obviously gets disturbed. But when you do this, as you pointed out, our cash flows that we generate in India more than takes care of what we need to spend and so we can manage our debt also. Well. So that’s a point of view.

I’m not saying that ours is necessarily the right point of view, but that is our point of view.

Unidentified Participant

Great. Sir, the second question is essentially on and you pointed it out to, in the answer to the first question, TMIL us increasing stake over there, I would say very prudent move. Logistics is something that, you know, we are literally struggling in steel industry. So just wanted to get a little bit more color on that. What kind of investments we are seeing over there in either slurry pipelines or rake procurement or any such thing to do, maybe coal convert, any such thing to do with the logistics part.

T.V. Narendran

So TMIL when it started was actually started as a port operations and shipping kind of logistics company. But today 80% of its revenue comes from moving stuff on the ground rail. So it’s one of the biggest operators in the country, I think it operates about 55 rakes now. So you know, a lot of our movement is through tmilill. So we see TMIL also manages a lot of warehouses for us to do just in time delivery for a procurement, etc. TMIL is also looking at waterways movement because one of the areas the government is also looking at is the waterways which is close to Kalinganagar, connecting Kalinganagar to Paradeep and all the way to Angul.

So TMIL can play a role there. So logistics like you said is a very important part of a cost. I don’t know if you know, but we have 5% of the freight revenue of Indian Railways, Tata Steel. So it’s because we move so much and ore so much coal and steel etc. So I think logistics is very important and hence we thought that we should simplify as much as possible. So now we are buying out iq which is a German company who’s been with us for more than 20 years. We still have NYK with us though. With NYK we have another company called Tata NYK which does the shipping.

So Tata NYK does the shipping and TMLL which is Tata Steel and NYK going forward will do a lot more on the ground. So in terms of the deal structure or anything, Kaushik, maybe you can give more details on the deal.

Koushik Chatterjee

Yeah, no, I think tmilil as Narendran mentioned is very strategic. And when you talked about the slurry, our slurry company is the JV that we have with Lloyds BRPL and we will expand that slurry pipeline. We’re looking at that transport or logistics. Very importantly we will look at doubling capacity there. So I think the entire logistics space between rail, logistics, waterways, logistics and slurry are the three very important ones that will be the frame going forward. And it is in that context it was best that we consolidate our holding versus keeping it at 50.

It was already a JV with 51% holding. It will go to 74 and Nyqua is the balance. So we will look at the next stage of growth in in our logistics and want to make it integral to our growth plans also so that it has been a profitable venture for all the three partners. It’s been paying dividend, the capital has been returned many times over for all of the three partners. So I think it is a question of now making it the larger landscape. And BRPL will look at the slurry pipeline as one of the key areas to grow in the future.

Not Just in east but potentially later on in the. In western India also.

Operator

Thank you sir. The next question is from Ashish Kejriwal of Nuwama. Ashish, please go ahead.

Koushik Chatterjee

Yes please.

Ashish Kejriwal

Okay, so two questions for me. One, when we said guide about 6,000 rupees price increase in first quarter, I hope we. We are including that our auto contracts also which was not there in third quarter, fourth quarter or this is over and about that.

T.V. Narendran

Yeah, this includes part of the auto contracts. But most of the benefit from the auto increases will come in Q2. Second we will get some of it in Q1.

Ashish Kejriwal

Okay, great. And secondly we were discussing about value addition as a way forward for our Indian business. But at the same time we haven’t discussed much on the Maharashtra venture which we were discussing last time. So any update on that?

Koushik Chatterjee

Yeah. So on Maharashtra we are. We moved. We have been discussing with the government. We’ve identified the land. We will be. As we get into more finality we will talk about it both on the mining side as well as on the land side. And so hopefully in the next three months or so we will give you an update in the next Q1 meeting about where we are on the land. More specifics about it. I. I don’t want to say it now because we need to get formal approvals in place and post that. So that is also as Naren mentioned, the optionality.

And to Amit, if you are still listening, it. It’s not the circumspect part. It is actually more definitive part. We know exactly what we want to do and therefore we kind of want to handle it in a manner where it is more definitive because the like in Maharashtra for example, we are very clear as to what we want to do. What we are looking at it. The government is on our side in terms of supporting these investments. We have to work together and make it more definitive and then we’ll make those investments.

So it is a question of how we pace it up. And so in Maharashtra in particular, I will. Ashish, I will be able to give you more specific about it in the next call.

Ashish Kejriwal

Sure. And lastly on Sir Europe, if I understand correctly now maybe we have to purchase Coke from the market in case if we have to close it and this can be delayed or this can be closed only within a year time now in case if this, you know, goes forward to. We need to close our blast furnace and other things also in order to reduce emissions. And by that time if we don’t reach agreement with the government then do you think that either we will close down or again we can look for some joint venture or buying or selling the assets or still we can go ahead with the investment to reduce the carbon emissions over there.

How to look at into it?

Koushik Chatterjee

Yeah. So if you look at it, if you want to paint a scenario or scenarios then yeah, each of them has its own pluses and minuses and options. As of now we want to run the plant as it is. The coke plant. Coke and gas plant is what we have consciously and over a time studied. We have a very detailed work done as to how it will get closed and that’s being shared with the regulators and the environmental agencies. And that is why we have a path to go forward. It is not next 12 months. It is not in. In that it can be done very soon.

It will require time and that is the time that we are in discussion with. We have made it very clear, not for anything else because there are, there is a way in which we can do it by segregating the the COCA when circuit to the rest of the plant and also ensuring that it is a makesafe closure. So if that happens then I think there is a path forward which is the best path forward at, at this point of time because as I said there will be cost penalties but that the way the market is moving and the way we will optimize it within the overall Tata Steel system, we should be okay if it is, if it goes beyond that then we will have to look at different alternative scenarios and what scenarios actually work for both for the Tata Steel Netherlands business and its business continuity as well as for Tata Steel as a primary shareholder.

So all of these have to be looked at and then comes the investment case. As we talked in detail earlier in the call, those are in sequence. So we have a lot of things to settle and set up and set right before we talk about the investment.

Operator

Thank you sir. The next question is from Ritesh Shah of Investech. Ritesh, please go ahead.

Indrajit Agarwal

Yep.

Unidentified Participant

Yeah, hi. Thanks for the opportunity sir. First is can you Give color on 6000 rupees of pricing Increase into Q1 if you could break it up April, May, June, probably the pass through which was there from Q4 and say something on the flats and longs. I think there’s a first easier one.

T.V. Narendran

So rather than give you month wise all I can say is the prices went up in March, April and May. Right. Or rather May is still, you know, being worked out. That’s as far as the trade market is concerned. There is some softening in long products largely driven by the secondary producers because I understand some of them are struggling a bit with working capital, high costs and disposing some of the steel that they have. So there is some pressure in long products in May that I see Flat products is still holding out because I don’t know if you know, but prices in China have gone up over 20, $25 in the last three, four weeks.

So international prices are going up. In fact, Indian flat product producers also have export options now. Export, export prices are not too bad. The weaker rupee is also helping exports. So export options are growing. So I would say flat products the pressure is a bit less because international is picking up. China prices have gone up. China’s exports has come down to less than 10 million after quite a while. And if you see the first four months of this year, Chinese exports are down. So I think flat products overall picture looks a bit better.

And for flat products it’s very auto driven also directly, indirectly and auto so far has been strong. So that’s a story on flat products. Long products is a little bit more sensitive to construction. Construction has struggled a bit in the last couple of months simply because of firstly the elections and labor going home to vote and things like that and secondary producers. So the gap between the prices of secondary producers and primary producers has kept increasing increasingly. So I’m not giving you a month by month breakup, but the guidance of 6,000 is largely driven by what we’ve seen so far till May.

We are not expecting any significant upside beyond May apart from the auto contracts. Auto contracts are still being finalized and normally what happens with auto contracts is once they are finalized and you raise the debit notes. So some of the money will come in in the next quarter. So in this case we expecting maybe 30% of the benefit to come in this quarter and 70% of the benefit to come in next quarter.

Unidentified Participant

Wonderful. So my second question is on Tata Steel, Netherlands and UK Kaushik. There are multiple permutations for Netherlands, Cocoon gas plants, Seabam. How should we look at normalized spreads? Basically if one had to assign a particular scenario with a higher probability, how should one look at spreads for tatas in Netherlands? Likewise for UK before and after EF and again for both the variables. Basically how is it that one should understand the impact of cbam?

Koushik Chatterjee

So as far as Netherlands is concerned, our base assumption for spreads is business as usual for the next 12 months at least that is. So whatever you have seen in the historical spread adjusted for CBAM uplift that is happening in the market today and for the coal prices that are, that has also moved up the spreads are no different. So, so there is no adjustment of any combination that we have in our base case scenario for the. For financial year 20, 27, 20s, in fact 27 and 28. We have to look at the conversation that we are happening that is happening currently with the regulator and the other stakeholders to see where is the landing ground for the timing of this.

Because there is a physical, as I mentioned many times in this call, there’s a physical timeline required to make a safe and controlled closure and that is what we are working on. So as far as Netherlands is concerned, next 12 months on a base case scenario we should get what we are looking at. The other issues on gas price increase, the West Asia are separate but purely from a raw material to steel price spread. It should be on the basis of what has been historically the baseline required adjust for the price increase that is happening.

UK typically, if you look at it from a post EAF typically good EFS work in the range of 6 to 8% EBITDA margin and our assumption is that is the same but we have more value added products in the portfolio so we should be able to get better than that. Cost efficiencies are fixed costs anyways being driven down. So when the EF comes in it should not have any big changes in fixed cost but other than the combination cost changes because the power will become an important factor, scrap will become an important factor and it will replace the cost of slabs or HR which is being bought at this point of time.

Operator

Thank you sir. I would now like to hand over the conference to Ms. Samita Shah for the chat. Questions over to you ma’. Am.

Samita Shah

So I think just continuing on the questions on uk, I think there are a couple of questions around this. One is what is the, you know, in terms of the import quota reduction which has happened in the uk? How does it affect the state, the sale of slabs from India to uk? And I think you’ve answered a lot about UK in general, but I think some questions on when do we expect UK to break even given the increase in prices in the uk?

Koushik Chatterjee

Slabs are excluded from quotas.

T.V. Narendran

Yeah. And the break even we are obviously given that the prices have gone up significantly since March. You know these announcements came in March, so the prices that we were seeking and I think we’ve said that in the last two, three calls the prices in UK were £100 lower than the prices in Europe. Now the prices in UK have caught up with the prices in Europe. In fact it’s slightly higher. And certainly, as Kaushik said, the EBITDA losses will shrink this quarter compared to last quarter and will shrink again the next quarter.

Now, whether it shrinks enough to be positive next quarter is something we are still working out because the Middle east impact on gas prices in UK and energy costs, etc. Something that’s being worked out, but largely we are heading in the right direction because we’ve got the policy support that we had sought.

Samita Shah

Yeah, thank you. Just in that same way and I think you answered it earlier, Naren, but because I think there are a few questions on this. Given the price increases or the guidance which we have given in both Europe as well as uk, is there significant spread expansion expected in both these geographies? I think you answered it, but maybe a few people have missed it. So if you can just.

T.V. Narendran

So let, let me put it this way. The prices are going up in both places for sure. Like I said, Q1 prices will be about 80 pounds higher per ton in UK compared to Q4 and in Netherlands it’ll be about 80 Euros per ton higher. Right. And the gold cost in Netherlands are going up by about $10. So obviously from that point of view there is a expansion, but we expect margin to improve in UK like I just described, EBITDA losses to shrink and come closer and closer to zero during this quarter and next quarter.

But in Netherlands this quarter, because we will lose about two months of DSP production. That’s about 200,000 tonnes of production, there is an impact of that on our performance in this quarter and hence, while we will be EBITDA positive, we don’t, we will not see a better EBITDA than in the previous quarter because despite the price sizes, price hikes, but going forward, because the. There is an import quota in Europe as well, we expect prices will continue to be on the higher side in Europe than we’ve seen in the past and the spreads will be supportive.

So once our operations get back to normal, I think we will start seeing the benefits of that. Overall, the plan this year on an EBITDA basis is higher than the plan for last year in Netherlands also. Thank

Samita Shah

You. I think some questions on the lawsuit in TSN in terms of, you know, the earlier lawsuit. If there’s any update on the status there, please.

Koushik Chatterjee

No, there is no material update other than the fact that we have time to file our defense on the lawsuit on the mass claim and we are working on it there. There needs to be experts who will study on the parts raised in the claim and that’s what we are doing. So at the time when we have to submit, we will do the submission and defend it.

Samita Shah

Thank you. We’ll move to India. Now some questions on what is the iron ore and coal production in India? You know, in FY26

T.V. Narendran

I think iron ore would be close to 45 million. Yeah, it’s about 44 million.

Samita Shah

Yeah,

T.V. Narendran

Yeah. It’ll be about 45 million tons and I think we’ve sold about 4 million tons if I’m not mistaken. That’s great. Yeah. And so we will continue to produce what we need for our own use and we’ll continue to maximize the sales. I think the challenge always in iron ore is more about logistics and evacuating the material. And when we have logistics constraints and the priorities on our own in house consumption. As far as coal is concerned, the in house production of, I mean consumption, the coal that we after wash.

We have roughly about 3 million tons of coal available for consumption. What we produce, the rock oil is maybe closer to 6 million tons.

Samita Shah

Yeah, yeah. Just a little higher, but yeah.

T.V. Narendran

Okay,

Samita Shah

Thank you. Any visibility on iron ore sourcing post 2030 and any, any color around that that we can provide? No,

T.V. Narendran

I think like we said, we will continue to participate in auctions but we will be prudent on what we bid. We will not bid beyond what we think makes sense. So. And we will focus on the iron or you know, leases that are available closer to eastern India because most of our capacity is coming in East. The second part of post 2030 strategy is what is evolving in Maharashtra for us. Our plan for Maharashtra is also hinged on iron or availability in Maharashtra. So that is the second part of the, the plan.

The third part of the plan is of course to look at imports. We’ve already got a shipment from Canada. We have very high quality or there. So while that may not be, you know, the most important part of our plan post 2030, but it allows us to test the logistics of bringing in iron ore from outside. The impact that good quality iron ore has. Because one of the disadvantages of Indian ore is the quality apart from the fe is not necessarily the best. The alumina is high and there are many other issues.

So when we look at import with low alumina, you can have better value in use. So we are looking at imports also as an option. And that’s why with most of our capacity moving closer to the sea, because with Kalinganagar and Nilachal, that’s 25 million tons of capacity which is closer to the sea than Jamshedpur, the bushan plant at 10 million tons will also be closer to the sea compared to Jamshedpur. So imports becomes a better option than for a site like Jamshedpur, which is far more England. So strategically we are in a better position, better place for imports.

So that’s where it is. We also have the optionality of our own leases. When it comes up for bidding in 2030, we can decide, we will decide on what should be a bidding strategy for our own leases, what of it that we want to keep, what of it we may not want to keep, what is the price we are paying for it, etc. So that optionality also exists for us. So I think we are objective is to have more options, keep these optionalities open so that we can decide as appropriate.

Samita Shah

Thank you. Then there’s a question on his Arna. Is there any update on the project and any learnings we have reached we have on that. And what is our thought on this going forward? Yeah,

T.V. Narendran

So I think so. These two projects, his Arna and Easy Melt are very, very important for us for the future. The advantage of Hisarna is it can use any raw material. I mean it can use poor quality, I know, poor quality coal, it can use thermal coal etc. Right. And you don’t need coke ovens, you don’t need a sinter plant. So there’s a lot of advantage of it. And we’ve been at it for more than 10 years. And the good news is our pilot plant in Netherlands is doing quite well. We have a team there for the last few years.

As was mentioned, we are also working with Nucor on this project. They are also very keen because they are also keen to build a plant like using Hisana in the US because they also need some iron feed into their electric car furnaces. So when we set up the pilot plant in. Not pilot. The pilot plant is in Netherlands. When we set up a commercial scale plant in India which may be close to a million tons, basically Nucor will work very closely with us and I think the engineering is being done for that.

We are very excited about this project and it can be a game changer because then that gives you even more optionalities as far as as raw materials is concerned.

Samita Shah

Thank you. And the last question I think which we’ll take for today, it’s on the FX debt in India.

Koushik Chatterjee

What about it?

Samita Shah

What is the amount of the FX debt in India? So you said 18% of the consolidated which is 17,000

Koushik Chatterjee

Crores.

Samita Shah

Yeah, that’s offshore. But I think the question is how much of it is on India. And that’s

Koushik Chatterjee

A billion is on offshore. So I think the effects did in India is somewhere around 5,6000 crores, right?

Samita Shah

Yeah. It’s 750 million of that ECB. And just to clarify to everybody, it’s fully hedged, so we don’t have a currency exposure on that. Yeah. So I think we have taken most of the questions and I think also took a lot of questions on the audio. So thank you everyone for your participation today, especially on a Saturday. I hope this helped you better understand the results and look forward to connecting with you next time. Thank you. And back in.

T.V. Narendran

Thank you. Thank you for joining us. Thanks. Thank

Pallav Agarwal

You very much.