Tata Steel Limited analyst Q&A

Operator Thank you, sir. We will now begin with the Q&A session. The first question for today is from Vibhav Zutshi of JP Morgan. Vibhav, please go ahead and ask your question. Vibhav Zutshi, JP Morgan Thanks for the opportunity. The first question is on Europe. Now some of the European players have come out with very strong commentary on pricing. ArcelorMittal has actually raised April delivery prices to €700/t, which is another €60/t higher than spot. Just want to understand how sticky and sustainable could these be because it looks like demand is still weak, but like you mentioned, expectations are around higher utilisation levels as imports start to come down. Thank you.

CEO & MD – Tata Steel Limited When you look at what's happening in Europe, while the demand has been quite stable at around 130 million tons for the last few years, imports had gone up to about 30 million tons. And as K oushik mentioned, the quotas that have been announced are going to halve those imports to about 15 million tons. So that's going to happen by June -July and in addition to that you have the CBAM, which has already started, and the CBAM has an impact on the import prices as well. So, if you're selling into Europe, even in this quarter, you'll have to factor in the impact of CBAM on the prices , and then on top of that, you're going to have a reduction in imports. So that's what is getting reflected in steel prices going up in Europe. So , over the last 2-3 years, we had seen the European prices move more towards the Asian prices, and increasing the gap with the US prices. But, because of these actions, we expect that prices in Europe will move away from Asian prices and move towards the US steel prices. It may not reach the levels of US steel prices but certainly will move closer to that. Vibhav Zutshi, JP Morgan Okay, thank you, that's helpful ; the second question is on India. Firstly, congratulations on the improving leverage ratios. Just want to understand the broad timeline for all the capacity expansion s - NINL, then this 2.5 MTPA at Meramandali and any indication that you can provide for the Maharashtra greenfield. And also, how to think about debt as capex will likely accelerate from now on.

ED & CFO – Tata Steel Limited In December when we said that we had the in - principle approval of the consideration of the board for the NINL expansion, we are working on it. We are maybe weeks away from getting the environment clearance and once we get that, our basic engineering ordering is in progress. So, I guess it will take about 35 -40 months when we get into the execution level. I think it is also important to mention that we will get to the FID in the next couple of months. So that will stitch in as far as this expansion is concerned. Maharashtra is slightly longer term because it is at the enabling level, and we will have to get into the project and the DPRs etc. So that's slightly longer, but parallel work is happening in terms of planning and conceptualising it. As far as the Meramandali expansion is concerned, we have to get the EC clearance. So, the first one is the NINL, the second one is the Meramandali and the third will be the Maharashtra or Kalinganagar expansion, whichever we are ready with. So that's the time frame or rather the sequence. The time frame will [inaudible] over the next three years or five years. The second part of the question that you asked about debt ; I think we've said that broadly we would like to be up to about 3x Net debt to EBITDA. And sometimes when you have cyclical issues, we move to 3.2 x, and when in better times or when we are able to generate more cash flows, it comes down , as you see now, we are at 2.6x. So that's the kind of range. We will not bust that range because we have a strong pipeline of capex which are productive. There is also a program for the downstream projects as we mentioned last time - the HRP GL has got approved , Tinplate is underway, TBSPL we have completed , and we have more downstream in the long product s segment including wires which is being worked on. So, it is in that range of the balance sheet that we will work on, in a mid-cycle. If the c ycle becomes much better, then we will recalibrate, but effectively the pace of growth will also be calibrated to that extent. Hope that clarifies. And to add to what Koushik said, we also have the Ludhiana plant coming up in the next couple of months. Vibhav Zutshi, JP Morgan Sure. Thank you, sir. Operator The next question is from Satyadeep Jain of Ambit Capital. Satyadeep, please go ahead. Satyadeep Jain, Ambit Capital The first question is on Europe. What is the status now on UK, the safeguard s and what discussions are you having with the government? Is there any progress there? And secondly on that front in Europe, given CBAM and the emissions have not been verified for a lot of importers, what is the trend in imports? Have they significantly reduced in Europe given the uncertainty on verified emission so far?

ED & CFO – Tata Steel Limited So as far as UK is concerned, as I've said in the narrative and in the previous narrative also , we are deeply engaged at all levels to get the safeguard and quotas out. We are hopeful that it will happen soon. We know it is progressing, and we are encouraged by that. But it has not happened . So, we are looking forward to the safeguards because it is in the interest of the UK domestic steel industry, not just us , to ensure that we have the recalibration of the quotas and the safeguards. It is also important for UK to do that in the context of the fact that EU has come out with the quotas and with their steel action plan, and therefore there is a need to harmonise it. So that is work in progress. As far as the CBAM is concerned, I think it's very early days , because there was some amount of stocking that happened pre -December. That’s why I mentioned that the effectiveness of CBAM, we will have to see as to how the imports reduce because the default rates are high at this point of time; the first year default rates are significantly high. For example, in case of China, it is about 3.1, in case of India, it's about 4.2 . So, I think we just need to see as to how it works. As Naren mentioned , irrespective of the demand conditions, there will be a n uptick in prices because arithmetically , it has to work in that manner. And then comes the steel action plan. There are two very fundamental regulatory triggers in EU which will push up the prices and will have an effect of pushing it towards the US prices . And if you look at the markup in the CBAM, it is a 10% markup in 2026, and a 20% markup in 2027. So, till the verification happens, the markup keeps increasing. So technically the prices should increase. Fundamentally, what's going to happen post the steel action plan comes in June or July is that the marginal cost of new supplies, either beyond quota or within the EU , which are the capacities that are shut down , w ill come at a marginally higher cost, that will also have a cost push element on the prices. So , we are certainly expecting that the price buoyancy to remain in the EU for a longer period of time. Satyadeep Jain, Ambit Capital Thank you for that, K oushik. Secondly, on India, just wanted to seek your comments on the budget proposal for National Waterways 5 in Odisha linking Kalinganagar to Parad ip. I know these projects can take long. What's your expectation there in terms of timeline and impact on cost? And if it comes through, does it make you rethink your decision to look at Maharashtra, because many players are also actively considering staying on the East Coast, including ArcelorMittal who has announced a greenfield plant on the East Coast. If that comes through, would that change your decision anyway? So, if I could comment on that . Firstly, Maharashtra is in addition to our plans for the East Coast . It's not in place of any plans. B ecause, if you look at our own plans for the East Coast, between the Kalinganagar complex that we have and Neelachal which is across the road, we have the opportunity to build about 25 million tons of steel capacity there, which is today at 9 million tons; 8 million tons in Kalinganagar and 1 million ton in Neelachal. So that opportunity exists , and this waterway that they are talking about will help that site. Then you have the Bhushan plant in Meramandali which can go up to 10 million tons. So, in Odisha, we have the opportunity to go up to 35 million tons as against the current 14 million tons. Maharashtra is in addition to that and gives us optionality on the iron ore and servicing western and southern markets. India is one of those countries where waterways account for a very small percentage of logistics. Whereas , if you look at most other geographies, whether it's the US, whether it's Europe, or whether it's China, a lot of material including steel, moves on the waterways. I think the government's ambition is to create a network of waterways and we are glad that they picked this waterway which is close to our Kalinganagar site because we think it will help us bring down the logistic s cost, which as you know in India is still higher than what it is in other countries. One of the reasons is the mix , because in India there's a higher mix of road compared to other geographies , and there's a lower mix of waterways compared to other geographies. Having more waterways is certainly going to help the logistics cost . But I think we don't have a timeline yet. I guess it will take some time because it means creating the infrastructure, it also means dredging, to m ake it an all -season kind of waterway. You also need to have handling facilities and barges. So, there's a lot that needs to be done, but we are happy that it's on the radar of the government. Satyadeep Jain, Ambit Capital Thank you so much. Operator Thank you, sir. The next question is from Pinakin Parekh of HSBC. Pinakin, please go ahead. Pinakin Parekh, HSBC Thank you very much. So, my first question is on UK. The losses in the UK operations are relentless , and there does not seem to be any policy support coming through. So how should we look at UK over the next few quarters? There's a safeguard in India, there’s CBAM in Europe, but there's nothing in UK.

CEO & MD – Tata Steel Limited In UK, a lot of actions have been taken by the team. We have ourselves reduced fixed cost by more than £400 million in the last two years, almost £500 million. So, I think in terms of cost takeout, all that could be taken out has largely been taken out. As Koushik explained, it is a problem because of the fact that the quotas in UK are higher than the demand in UK and that's what the government is expected to revise and more so , because of the actions taken in the EU. So we've been promised that these revisions will happen soon. You must also reali se that the UK government itself is invested in the steel industry because of the steel plants that they've taken over. So, when the steel industry is losing money, it directly hurts the UK government as well. We are hopeful that some actions will be taken because , with these levels of quotas and these prices, it's obviously not looking good from a n EBITDA point of view. What has happened because of the actions we've taken , as K oushik said, is that EBITDA losses have halved. It is still there, and we expect it to keep improving because of the actions we are taking, but it will not become positive till there is some action from the UK government on the imports or if the steel prices go up in UK. So, I think we are expecting that some actions will be taken in the next few weeks by the UK government and once it happens, hopefully we are on track to make sure that UK is on positive EBITDA territory. But yes, it is a challenge, but given the actions being taken in the US, in Europe, in India and elsewhere, we expect the UK government also to be taking those actions soon. Koushik, you want to add to that? No, I think that's perfectly fine. I just wanted to tell Pinakin that we also have some actions being planned. But fundamentally, because we will also look at building a new plant , we don't want to do anything which will affect the long term. And therefore, we are also looking to ensure that the assets run at the most optimal ability and the conversion cost continues to be in a manner where we can be competitive , post the build of the E AF. So, just now, we are looking for more external policy support as an industry. Pinakin Parekh, HSBC Thank you. So just continuing on that , Tata Steel is doing everything it can, but it is facing the twin problem of making an investment while having EBITDA losses. On the policy perspective, you would expect support from the government on the existing steel environment and assume that there would be policies related to the capex. So, would the company at some point of time wait for the policy to fructify before stepping upon the capex or will the capex continue irrespective of whether there is any immediate support from the government?

ED & CFO – Tata Steel Limited So, if I may just try to articulate it. See, once the EAF is built, our cost structure will be different. When our blast furn aces were running, our cost structures were high. We transitioned to plan for the E AF because the cost structure would be lower than what we were running at. We are at an intermediate phase where we are buying the substrate and then working on the conversion cost. So, the point is that if we were to not progress with the EAF, we are going to delay that transition into a more profitable unit. So, I think there is no upside in delaying the investment. On the other hand, if all factors are aligned, and here we are dependent on the National Grid for the electricity connection and also our own internal projects for getting it done. But the quicker we can convert it to that stable state, at least we will be in a better cost position, better workin g capital position, and not cutting slabs and rolls from all over the world. So, we have done that analysis and scenarios, and it makes sense to continue to do the project. Take the money which the government has given, as it is a participant and that's the basis on which we continue to execute the project at this point of time. In the longer term, we hope that the government for its own requirements , as Naren mentioned is also a big participant now, and a direct owner or a controlling entity of the rest of the steel industry in the UK , is also very mindful of the fact that this bleed needs to stop ; not just for us but also for them. And I hope that it is in a matter of weeks now. Pinakin Parekh, HSBC Got it. Just lastly, with the safeguard duty place d in India, and the price hike tha t we have seen in India in the spot steel market between December and Feb ruary, is it fair to say that the December quarter EBITDA per ton was probably the low , till the safeguard duty is in place?

CEO & MD – Tata Steel Limited I think December quarter prices, particularly the first part of that quarter was probably the lowest in the last five years for flat products, and pretty low for long products as well. So, in some sense , that was the bottom as far as the prices are concerned. So yes, we expect better numbers this quarter. But we should keep in mind that coking coal prices are also going up; we are conscious of that. But still , prices are certainly coming back to the levels where it should be , because it used to be at a discount to import landed. Now it has caught up with import landed [inaudible]. Pinakin Parekh, HSBC Yeah. Got it. Thank you very much. Operator The next question is from Prateek Singh of IIFL Capital. Prateek, please go ahead. Prateek Singh, IIFL Capital Hi, thanks for the opportunity. So, the question is more strategic and regarding the fixed cost takeouts in India and the medium-term human resources plan. How are we preparing for the iron ore mines expiry, if any in 2030? Any plans to move to a MDO model for m ining in the medium term to strengthen the employee transition ? I understand that we mine much more than our peers and there is always an element of contractual costs as well. But I think our standalone employee costs would be higher than that of our largest peers in our operations and that of the largest listed iron ore miners in India combined. So, is there any way to get a sense as to what percentage of India employee cost is on mining and how are we planning to do this transition over the next four years?

CEO & MD – Tata Steel Limited I'll maybe give it a shot and then K oushik can supplement. So firstly, I'm not sure if our mining costs are much higher than others because we run a very, very efficient mining operation both for coal and iron ore. If you look at Tata Steel's legacy costs, a lot of the legacy costs are in Jamshedpur . So, if you look at the cost structure, and the demographic profile of our employees in Kalinganagar and other sites, it's much better ; we don't have those legacy costs. As Tata Steel grows more and more in Kalinganagar, Meramandali , etc., the impact of the legacy cost s in Jamshedpur keeps coming down and we are addressing the legacy costs in Jamshedpur. So, because of these actions, the cost disadvantage we may have in some sites vis-a-vis our peers will keep reducing , and we will be doing this obviously in a n accelerated way till 2030. That is one part. The second part is , because of the fact that all our sites are within 200 kilometres of each other , w e have some advantages of scale because if we are moving to 40 – 45 MTPA, all of that is going to be produced in about 200 kilometres from each other and that gives us a lot of advantages on scale economies , etc., which will also help us negate some of the impact, post 2030. Thirdly, as we mentioned earlier, our move into Maharashtra, and our move into recycle based steel in north and west, are also actions that we are taking to mitigate the impact. And fourthly, the move into downstream basically looks at how we improve the mix, how we get better reali sations, and so forth beyond all the cost takeouts that we are planning. All these are expected to mitigate the impact of any cost increase that we will face in 2030. This is broadly the plan and Koushik you can add to that.

ED & CFO – Tata Steel Limited Yeah, I'll just add two points Prateek. One is the fact that we are not going to exit captive mining. We have mining reserves which are opening up and therefore mining as an activity will continue for Tata Steel. Mine Developer and Operator ( MDO) as an option will always remain and we will be looking at certain opportunities. We also now have BRPL which will be in that space , if required. So, I think the transition planning for 2030 has already started. We are looking at various alternatives as Naren mentioned ; even Maharashtra is an important alternative. So, the manpower cost i s not so much of an issue. We also do [inaudible] of contract workers in there, so it is not that we are very heavy . In the sense, from a cost point of view , cost of ex-mines iron ore for us at this point of time is possibly one of the lowest. I think it is not at all high compared to the rest of the industry. With more mines opening up, be it Kalamang, Koira, Gandhalpa da, etc., we will be redeploying people and reworking on how we can ensure that the transition costs are minimi sed. Prateek Singh, IIFL Capital Understood. So, I understand that, would there be any way to get a very ballpark sense as to what percentage of the entire employee cost is on specifically mining operations.

ED & CFO – Tata Steel Limited I don't have it off hand, maybe we can do that later. Prateek Singh, IIFL Capital Thanks. And the second question is largely on Europe. As an earlier participant mentioned as well , the prices have risen quite a bit , to $750/t from $650/t a few months back. So wanted to understand the nature of our contracts , and with what kind of lag do we see these prices coming up to our P&L. So, contracts are about 35%, largely in packaging which is one area where there are one year contracts and six months contracts. Automotive is the other; automotive has its own cycle. That's the point I mentioned that the benefits of the EU domestic prices will depend on the effectiveness of the CBAM as well as the quotas, both together. So, I think the full impact of that will come gradually and not in one jump. And I think the estimation is that there is an opportunity for almost €100/t increase in prices over the full year. So, we just need to watch the space and see all that is said and done. If there is a Euro on the table, our colleagues in Netherlands will certainly work to ensure that we get it. But it will happen in at lea st two stages; one is CBAM now and secondly when the tariffs come in post June 2026. Prateek Singh, IIFL Capital Understood. Thanks, and all the best. Operator Thank you. The next question is from Vikash Singh of ICICI Securities. Vikash, please go ahead. Vikash Singh, ICICI Securities Thank you for the opportunity. So , my first question pertains to Netherlands. How much carbon credits do we have as a percentage of overall requirement right now? Since in the last call you said that your emission levels are already closer to 1.6 tCO₂/tcs, does that mean that whatever carbon credits we have, these are surplus, or we still have to pay or buy some additional carbon credits?

ED & CFO – Tata Steel Limited The reference point I'm using is the CBAM. So, the reference point for CBAM for EU domestic producers is 1.37 tCO ₂/tcs. So, if it is 1.37 tCO₂/tcs and we are produci ng at 1.66 or 1.68 tCO₂/tcs, there is a gap and there is a free allowance that comes in. So, we have to buy the net of that. I think we will still be buying, and we'll continue to buy till we do the transition because the reduction in free allowances is going to happen from this year to 2032 or 2034. Vikash Singh, ICICI Securities Noted, sir. And the second question is regarding your outlook on the price increase in 4Q. If you could give us that.

CEO & MD – Tata Steel Limited Price in India or Europe? Vikash Singh, ICICI Securities Both geographies, India and Netherland, price and the cost, especially the coking coal cost changes.

CEO & MD – Tata Steel Limited I think the guidance we are giving is, India prices on QoQ will be about Rs. 2,300 /t higher, and on a spot basis of course , hot rolled will be much higher, but I think when you look at the mix and you look at some of the contracts that we have, we see an improvement of about Rs. 2,300/t. In UK, it's going to be about £5/t higher or so. In Netherlands, on a spot basis it is going to be higher on the hot roll coil, but because of the mix issues that K oushik referred to, and the fact that the packaging contracts are getting renegotiated, we are seeing a QoQ reduction of €30-33/t per ton from 3Q to 4Q. But having said that, we expect Netherlands to more than offset this reduction in reali sations because of cost take out, so we expect an EBITDA expansion in Netherlands, and a slight improvement in EBITDA in UK. Also, because we expect Netherlands to be selling almost 400,000 tons more in 4Q compared to 3Q. And India will also see an EBITDA expansion because although the coking coal cost impact is going to be about $15 /t, the benefits that we will have from the prices , the slightly higher volumes as well as the mix is going to be better in India. So overall we expect EBITDA to be better in 4Q compared to 3Q, and volumes to be almost half a million tons better in 4Q compared to 3Q. Vikash Singh, ICICI Securities Noted, sir. Thank you. Operator The next question is from Pallav Agarwal of Antique. Pallav, please go ahead. Pallav Agarwal, Antique Good evening, sir and thank you for the opportunity. So just want to check, with CBAM coming in, will some of the exports that were going to Europe, come back to India and pressurise domestic prices?

CEO & MD – Tata Steel Limited You mean as an industry? Because Tata Steel doesn't sell much to Europe. We send slabs to UK for our plant, but otherwise we are not a big exporter of steel to Europe. Maybe some of our peers are, but I don't think that volume will be so significant as to make an impact in the domestic market in India , because the demand is pretty strong in India. In the l ast couple of quarters, there was a little bit more ramp up of capacities because our capacity ramped up and a few others, but now there's better balance in the domestic market. So, I don't expect that to have an impact on prices in India. Pallav Agarwal, Antique Sure sir. Any volume guidance for FY2027?

CEO & MD – Tata Steel Limited Because we are in the process of finalising a plan, we'll give you that guidance in the next analyst call. Pallav Agarwal, Antique Sure sir. Lastly, are there any premium products in the UK or Europe that can actually come into India despite the safeguard duty? Is there any opportunities in the Indian market for that?

CEO & MD – Tata Steel Limited No, I think the competitiveness will not be there . If you look at the costs in Europe and the prices in Europe, it doesn't make sense to ship from there to India. But what we are certainly doing is working very closely together in many areas because there are many applications that we have in Europe, particularly in the construction industry, which we are bringing back to India from the experience that we have. There are of course some special products which come from UK. For instance, IKEA when they build their warehouses , the roofing sheets actually come from one of our UK plants. So, there are these kinds of specialised requirements but not very significant volumes. Pallav Agarwal, Antique Thank you, sir. Operator The next question is from Aditya Welekar of Access Securities. Aditya, please go ahead. Aditya, we are unable to hear you. We request you to please send in your question via chat or rejoin the queue. We will now move to the next question. The next question is from Ashish Kejriwal of Nuvama. Ashish, please go ahead. Ashish Kejriwal, Nuvama Two questions, one in Europe and second in India. In India, is it possible to share how much price drop we have seen in 3Q versus 2Q and, how much coking coal cost reduction we have witnessed in 3Q.

CEO & MD – Tata Steel Limited So, for India, the price drop was about Rs. 2,100 /t, in 3Q compared to 2Q. We had guided Rs. 1,500 /t but the market was softer, particularly in October and November. Prices started going up only towards the middle of December. In terms of coking coal, I think the consumption cost was up by $4/t for India, in 3Q compared to 2Q. Ashish Kejriwal, Nuvama And secondly, is it possible to share the UK conversion cost because from what we understand, in UK, even if government gives support and steel prices increases, obviously our slab prices will also increase. The cost takeouts which we have already taken and most of the efficiencies have already taken place in terms of cost reduction. So , what kind of government measures are we trying to look at to make EBITDA positive in UK. And in Europe , while you are guiding reduction in prices because most of our contracts start from Jan uary, we have witnessed spot price increases. So even if the entire price increase will take into account the entire year, how are we going to see the reduction in prices in Netherland s in 4Q. And at the same time, when you are seeing that cost reduction will help in offsetting all the price decline and EBITDA will expand , this is on account of only cost reduction or when prices increase will we expect higher EBITDA?

CEO & MD – Tata Steel Limited So, I'll let Koushik address the UK question. In Netherlands what's happening is that it's more of a mix issue, rather than a price issue. The price at a hot roll ed coil level is going up. We don't do so much on spot basis . But it's going up by about £20-25/t, from 4Q to 3Q. Where we are getting hit a bit is in packaging. Two things are happening on packaging contracts. Firstly, there's a renegotiation of packaging contracts because of new contracts , and then there is a price drop. The second thing which is happening is that a lot of volumes of packaging used to go to the US , but the volumes are being cut to the US. That volume which does not have so much of a market in Europe , is being sold in , let's say engineering grades and other grades. So, from a mix point of view, there is a dilution. This £33/t is more of a mixed dilution impact rather than a price drop impact - it's more of a mix impact. But like I said, the cost takeouts are going to be more than this and hence , we expect the EBITDA to get better . G oing forward, as K oushik said, we expect this momentum on prices to keep getting better in Europe and that's why we are more bullish about the prices in Europe for this calendar year. Koushik, you want to comment on UK?

ED & CFO – Tata Steel Limited Yeah, so very broadly, if you look at the price drops that have happened over subsequent quarters or years actually in UK, the average price at a point in time used to be well over £900 /t. Now, at this point of time , we have multiple downstream products. There is tinplate, there is color coated, there is automotive, tubes, etc. So , what we are looking at essentially is , if the quotas are in place and the tariffs are in place, then the spread will increase and I think that spread increase of say, £75-80/t would be good enough for us to look at increasing the profitability to make it neutral. Ideally, if the right quotas are in place in a similar manner in EU, the price increases should recover to somewhere over £100/t and that will help in the profitability significantly. Ashish Kejriwal, Nuvama So, sir, do you mean to say that at a spread of around £100/t, we will break even?

ED & CFO – Tata Steel Limited Delta. From where we are today. Ashish Kejriwal, Nuvama At what spread will we breakeven in UK?

ED & CFO – Tata Steel Limited So, I'm saying that, wherever the spread is today, that spread has to expand by about £100/t to make it a profitable entity. Ashish Kejriwal, Nuvama Okay. Thank you so much. Operator Thank you. The next question is from Indrajit Agarwal of CLSA. Indrajit, please go ahead. Indrajit Agarwal, CLSA Thank you for the opportunity. I have two question s. First, when is the next auto contracts renewal due in India and what kind of price increase can we look over there

CEO & MD – Tata Steel Limited I can't give you guidance on the price increase but certainly prices will be higher. We expect it to be higher to reflect what's happening in the spot markets. Contracts are due for renewal in April , I think , and the next set of new prices will be effective April. So, we are not seeing the benefit of auto prices this quarter. Whatever we see this quarter is a benefit of the spot orders. Indrajit Agarwal, CLSA These are now quarterly pricing contracts, right? Largely, yes. Auto is now largely quarterly contract s. Sometimes you may negotiate two quarters in one shot, but it's typically a quarterly contract in India. Indrajit Agarwal, CLSA Sure, thank you, that's helpful. My second question is on spot basis, what are the spot steel prices and coking coal cost s vs. the 3Q realisations that we had?

CEO & MD – Tata Steel Limited In India, you're asking? Indrajit Agarwal, CLSA Yeah, both in India [inaudible].

CEO & MD – Tata Steel Limited Coking coal, like I said, on a consumption basis will be about $15 /t higher in 4Q compared to 3Q. On a mixed basis, India prices will be Rs. 2,200/t higher, but if I were to look at the hot rolled coil, I think it will be about Rs. 3,500/t higher. Indrajit Agarwal, CLSA Now, I want to check that you will have some inventory and some in transit for coking coal as well, right? So, let's say if I were to look at 1Q, would there be a further $10-15/t increase in 1Q FY2027?

ED & CFO – Tata Steel Limited Indrajit, what he's saying is on a consumption basis. That takes the stock into account.

CEO & MD – Tata Steel Limited So, if I look at purchase, it is actually $22 /t higher in 4Q compared to 3Q, but the consumption is $15/t because of what you said. We have materials in transit and things like that, and some of this will flow through into the next quarter. Indrajit Agarwal, CLSA Sure, that answers my question. Thank you so much. Operator Thank you. The next question is from Sumangal Nevatia of Kotak Securities. Sumangal, request you to please go ahead and ask your question. Sumangal Nevatia, Kotak Securities Thanks. So, the first question is on the volume growth headroom . Just want to understand , given our rated capacity, what is the potential volume we can achieve in the next two to three years without NINL. I believe, Koushik mentioned that NINL would take around 40 odd months. So, am I right in expecting that the commissioning would not be before FY2030? FY2029. If you look at next year’s volumes, while we'll give the specific guidance when we do the next analyst call, next year we will not have any major blast furnace relines. This year , we've lost a significant volume because we had a blast furnace relining scheduled in Jamshedpur. We won't have that, so that will be a positive for next year. Second thing is that we'll have the Ludhiana plant starting up maybe by the middle of March. That's also a plus that we will have. Thirdly, this is not in absolute volumes, but in terms of mix, you will see significant improvement because the cold rolling mill, the galvani sing lines, and the combi mill in Jamshedpur, are all ramping up in the second half of the year . So, next year you'll see the full benefits of all this. These are the areas where we see some benefits for next year , at least as far as India is concerned. But we'll give you more specific guidance when we do the next analyst call. Sumangal Nevatia, Kotak Securities Understood. But, mathematically, two to three million tons is the headroom before the next expansion kicks in. Is that right? I'm just comparing with few peers who are much more aggressive in expansion. So, is a market share loss over the next few years, a point of worry or consideration for us in evaluating all the expansion plans?

CEO & MD – Tata Steel Limited So, there are a couple of comments that I want to make. Firstly, the way we approach an expansion plan is now changed. We first get all the environment clearances and everything else before we get the FID done , because we find that gives us more definitive timelines. Let's say N eelachal also, as K oushik said, we could have said last year itself that we are expanding, but then there's no EC, so there's nothing you can do till then . So, that's one thing that has changed. Second thing is, as we said earlier, there is a lot of focus on increasing our downstream capacity and product mix. Generally, in Tata Steel, we always look at whether our market share in attractive segments be twice our overall market share. So, if we are a 15-20% market share player, then in the attractive segments, we should be at least 40% or more . So that's what we chase because that gives us a better realisations, better product mix, and less vulnerability to cycles. So that's why , whether it's auto, whether it's oil and gas, or whether it's retail business, we are chasing more and more downstream. So, in our downstream mix, for instance, we are moving towards a million tons or more of tubes. We've just approved some expansion in wires, and we have about 700,000-800,000 tons of wires and that to very high end wires. I think these are the areas we will focus on. We will be looking at market share, but we will be looking more at market share in the right , attractive segments, which are more quality conscious and less vulnerable to cyclicality. So yes, we have the runway to grow, and we will continue to grow. Sumangal Nevatia, Kotak Securities I understand, that's very helpful . T here's a lot of news flows with respect to Thyssen krup and one of the Indian peer s evaluating it. Just want to know your view on how do you see industry structure changing . Any consolidation or anywhere we are looking to participate in any form and how does it change the market?

CEO & MD – Tata Steel Limited I think in Europe, we are focused on transformation, and transforming our facilities . As Koushik just explained sometime back. In UK, there are a lot of cost take outs, and the transformation will put us in a better cost position. In Netherlands, it's more about driving cost efficiencies and the impact is already visible, but we need to do some more of it and then do the transition. So, we are focused on these two sides and making sure that they are in the right place on the European cost curve. But the second point is, I do believe that in Europe there will be supply side restructuring simply be cause anyone whose blast furnace is up for relining will think hard before relining a blast furnace. They will p robably not reline a blast furnace and not everyone who has a blast furnace up for relining will have the ability to invest in new facilities. So that depends on your balance sheet and that depends on the support you get from the government , etc. So, I do see some sort of supply side restructuring. The re will be bigger players who have the ability to invest in the transformation , and there will be some who will not have the ability to invest in the transformation. And so , when their blast furnaces come up for relining, you will see some restructuring on the supply side, which helps the overall market dynamics in Europe. So that's why given CBAM, quotas, and the supply side actions that are happening in Europe, we do see Europe looking more attractive in the next few years than it was in the past few years. Sumangal Nevatia, Kotak Securities Got it, got it. Thank you and all the best. Operator Thank you. The next question is from Rajesh Majumdar of 360 ONE Capital. Rajesh, please go ahead. Rajesh Majumdar, 360 ONE Capital Hi, good evening. So sorry to harp on the Netherlands a little bit more, but I just had a question . Are we to assume that the price increases we are seeing there are going to be a pass through or are there any costs that we should be cognizant of in terms of the environment ? In there so mething more in the CBAM or what we're already paying or any other change in the cost from what it is right now. I know that you have contracts, but ultimately , should the price increase pass through in terms of the bottom line or could there be any other cost that we should be aware of.

ED & CFO – Tata Steel Limited No, the price increases that are looked at on account of CBAM and tariff are pass throughs. There wouldn't be any impact on additional cost. In fact, th is CBAM cost is a compensation of the cost that we pay with the imports that come in. So therefore, it is more of a reimbursement of the cost that we pay. So, I think that is how we should look at it and that quotas are effectively related to the imports that are happening. So, that has no additional cost implication f or us as such. So, the short answer is no in terms of any relatable cost s. There are other cost factors that are there in EU, but those are unrelated.

CEO & MD – Tata Steel Limited In fact, if at all, we are focused on cost takeouts, which as you're aware , have been effective in the last year and a half, and will continue to be so going forward. Rajesh Majumdar, 360 ONE Capital Sure, sir. Also, there is a class action lawsuit filed against Netherlands in December by an environment related company. what is the status of that and is there any development on that front?

ED & CFO – Tata Steel Limited So that has been filed, as you know, by a foundation or a trust, which is backed by professional litigation financiers. It is kind of a suo moto class action, and there is a three months or four months phase during which we are required to submit our defence, and that's the process that is currently going on. We are obviously looking at it carefully and seriously to ensure that we can put what is actually the truth on the ground. So, that is in the initial phases at this point of time. Rajesh Majumdar, 360 ONE Capital Right. My second question was on the color coated business. What is your target capacity in this business , because that is a high value -add business where I think the reali sations can be quite significantly higher. So, what is the kind of capacity you are targeting in this business and over what period of time.

VP CFTRM – Tata Steel Limited Yeah. The current capacity is around 600 ,000 tons and the idea is to also change the product mix more favourably in the color coated business. We are obviously doing a lot of retail, but the idea is to increase that further. So, there will be an improvement in the overall product mix and in the next stage, we will evaluate capacity expansion in this business.

CEO & MD – Tata Steel Limited I think what it does , apart from giving us the ownership of the JV , is that it also frees us up from some of the JV conditions which limited our opportunities to get the most out of all the color coat ed lines that we got when we acquired Bhushan. So, there is an opportunity for us to make better use of the lines, some of which were underutilised because we were restricted to participate in the construction market other than through the JV. So, I think there are a lot of advantages we are seeing and obviously beyond de bottlenecking and increasing production, we will work on the product mix. We will also want to scale up. We have an opportunity to also expand in Kalinganagar as a downstream. So, there are multiple options. We also have an opportunity or an optionality in Jamshedpur where we have a 250,000 ton s line to convert the metal coating into color coating. So, there are many options that we have, and our aim is to actually double the profitability of the business in the next year or two. Rajesh Majumdar, 360 ONE Capital Thanks. Operator Thank you. The next question is from Prateek Singh of IIFL Capital. Prateek, please go ahead. Prateek Singh, IIFL Capital Thanks for the opportunity again. Any update on how are we going ahead with the H Isarna pilot project? I understand that Nucor is also looking into it and I think that the Department of Energy also proposed a funding for this pilot project. Can we expect any such thing by the Indian government as well in our case?

ED & CFO – Tata Steel Limited As we mentioned that it is fundamentally a Tata Steel IP, and we will be looking at doing it in Jamshedpur. Yes, the conversation with Nucor is happening at this point of time , but this is something that we will set up in Jamshedpur. The mechanism or method of participation with Nucor is under discussion. Then we will see as to when we can go post the engineering work, which is commencing, and then we go for the FID to develop this plant in Jamshedpur.

CEO & MD – Tata Steel Limited Yes, we will of course work with the government if there are any opportunities to get some support , but largely the value we see in this project is that you have far more flexibility in use of the raw materials. You don't need to have a sinter plant, a pellet plant, coke plant , etc. The CO₂ that you emit is far more amenable to carbon capture and utili sation and we've been working on this for more than 10 years . W e worked along with N ucor in running the pilot plant in IJmuiden quite successfully for the last two to three years. So, we are very bullish about the prospects of this project and as K oushik said, we'll be setting it up in Jamshedpur. Prateek Singh, IIFL Capital Thanks. And given the expansion that you are seeing in the data centre space and the government also announcing tax holiday, do we have any plans for electrical steel like CRGO , because I think that the transformer industry has been kind of complaining for some time that India is short of electrical steel capacity. So, any plans there?

CEO & MD – Tata Steel Limited So, there are two aspects to what you said. Data centre in itself offers a lot of opportunities for steel because of the fact that the buildings will use steel, the storage racks and everything else will use steel. There is a focused effort on looking at w hat we can supply to the data centres and what are the steels that we can develop and provide. I think that is one part of it. Th e second part is that, yes , CRGO is part of our plans. We are assessing it and most likely the plant will come up in Jamshedpur, but we are still looking at various aspects of it. So, we are working on it. Prateek Singh, IIFL Capital Just one last question. Can we get the number of overall deliveries from Europe because there might be inter -segment deliveries as well between UK and Netherlands?

ED & CFO – Tata Steel Limited No. They're not too many. Prateek Singh, IIFL Capital Okay, so we can just add them up and take it.

ED & CFO – Tata Steel Limited Yeah, there is some amount of slabs which goes to the UK, but it is not material. I mean , it is not the biggest part of their transfers. Prateek Singh, IIFL Capital Understood. Thanks for the opportunity again and all the best. Operator Thank you. The next question is from Siddharth Gadekar of Equirus Securities. Siddharth, please go ahead. Siddharth Gadekar, Equirus Securities Just on the European side, if we look at the OECD capacities , there are around 213 -215 million tons while Europe production has been in the range of 130 -140 million tons. So, do you have any sense of how much is the effective actual capacity in Europe and over the next five to six years , given that everyone will have to transform or go for the transformation journey, what would be the effective capacity in the next five to six years that would be there in Europe? So, capacity is sometimes a very misleading kind of number . How much of that 220 million tons is produced steel , is a question to ask. Generally, in Europe, you will see that production is roughly around 130 million tons, and there are exports and imports. Imports have largely been about 30 million tons and exports have also been around that level. So that's been the balance. Second part is that a lot of these capacities are very high cost capacities . If you look at the European cost curve of production, there are efficient or low cost plants like some of our plants, or some of the Arcelor Mittal plants . And then there are high cost plants and those are the ones which tend to get mothballed. Some of them are inland and logistics costs are higher . So, like I said, if the quotas are reduced, that means more capacity will come on, but those capacities which come on or mothball capacities which come back on are higher cost. And that's why we believe that our plant in IJmuiden is well positioned to have the advantage of higher prices in Europe. That is one. Secondly, like I said, people will think hard if any blast furnace is due for relining in Europe . I don't think anyone is going to reline a blast furnace in Europe now. So, it's more of a question of run ning it as long as you can and then if you have the ability, invest in a new process route. That's wh y I feel that over the next 5 -10 years, there will be a fair amount of restructuring on the supply side in Europe. I think you're already seeing that , even some of the bigger guys have announced closures of some of the blast furnaces and not necessarily replacing all that capacity with new process routes. Siddharth Gadekar, Equirus Securities But then , is it fair to assume that over the next couple of years, we can see , if things stand where they are, demand outpacing the production in Europe?

CEO & MD – Tata Steel Limited Demand will grow. So, what's happening in Europe is , given the intention to spend a lot more money by European countries, we do see a pickup in infrastructure spend , particularly led by Germany. We do see an increase in defence expenditure. I'm not even counting what happens if the Ukraine war stops and there's reconstruction there . So, even as it is, we do see growth in some sectors, but there is also a bit of degrowth in some other sectors. For instance, if , let's say we were exporting a lot of automobiles from Europe to the US, some of that may get impacted . You will have some volumes dropping and some volumes increasing. But overall, I don't see demand growing very significantly and I don't see it shrinking. It will go up maybe 5 -10 million tons at best . It's more of the supply side which we are talking about, both from imports being limited and domestic capacities also going through this transition , either to new process route s or closing down blast furnaces. Operator Thank you, sir. I would now like to hand over the conference to Ms. Samita Shah for the closing comments. Over to you, ma'am.

VP CFTRM – Tata Steel Limited Thank you, Kinshuk, I think we've answered all the chat questions which have been asked. We'll not raise them again. Thank you very much for joining us today and we look forward to connecting again with you all next quarter. Thank you. Thank you everyone. Thank you very much.