Ladies and gentlemen, good day and welcome to the Tata Steel Limited conference call. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I would now like to hand the conference over to Ms. Samita Shah. Thank you, and over to you, ma'am. Yeah. Thank you, Janice. Good afternoon, good morning, and good evening to all of you joining us on this call today. On behalf of Tata Steel, welcome to this call to discuss our results for the Q2 of FY 2022. The results were published yesterday, and I hope you've had a chance to go through them. We have with us our CEO and MD, Mr. T.V. Narendran, and our Executive Director and CFO, Mr. Koushik Chatterjee, who will walk you through the numbers and address any questions you may have. After a few opening remarks, we will move into Q&A, where we will take your questions. Just a few comments. As the merger of Tata Steel BSL into Tata Steel has been approved, all the numbers for Q2 are inclusive of Tata Steel BSL, and past numbers have also been reinstated to reflect the same. Secondly, as usual, we will also take questions on TSLP. Investors of TSLP, if you have any questions, please feel free to use this opportunity and ask us. Lastly, for our retail shareholders, do type in your questions in the chat box, and we will try and address as many as we can. Finally, the disclaimer, which is there on page two of our presentation, which is loaded on our website, will cover the entire discussion today. Thank you, and over to you. Thanks, Samita. Good day, everyone. I'm T.V. Narendran here. Just a few comments before I hand over to Koushik Chatterjee. The global economy has recovered faster than most people expected with the policy support from governments as well as accommodative monetary policies from central banks and also progressive vaccination. However, the increasing number of cases in China and Europe continues to pose a risk, as well as supply chain disruptions and tapering of liquidity are areas that we are watchful about as we plan for this recovery. The steel prices have been volatile within a range over the last few months, and a few factors are contributing to the situation. One is the input costs continue to be quite high. Iron ore prices have dropped from over $200 to less than $100, but coking coal prices continue to be high at $550-$600 in China and $380-$400 for the rest of the world. This, in some sense, keeps a floor on the prices, and that's why, while there has been volatility, it has been range-bound at a higher end of what we've been seeing for the last few years. On the second point I wanna make is China has continuously cut production month-on-month. You will see that Chinese exports have been below 5 million tons. It's been in the 4 million-5 million ton range, and that has made sure that China is not yet or no longer a disruptor in the international market. I think overall, it's been positive. As far as Indian demand is concerned, it shrank by about 2.3% quarter-on-quarter due to seasonality and temporary weakness in various steel consuming sectors because typically July, September is the weakest quarter because of low activity in construction. This time it was supplemented by the semiconductor issue for passenger cars and the commercial vehicles. Volumes had not picked up in Q2. India's domestic steel demand is expected to improve with the onset of the festival season. Steel prices, which were I mean, for most of the last year at a discount to import parity prices, have started increasing with improving demand across segments and high coking coal prices, and steel prices now are slightly above the landed import prices. Moving on to our performance during the quarter. During the quarter, Tata Steel India crude steel production improved 2% quarter-on-quarter to 4.73 million tons as opposed to the previous quarter because the previous quarter was also impacted by the supply of liquid medical oxygen to different states in India. Our steel deliveries improved 11% quarter-on-quarter to 4.58 million tons, despite the contraction that I mentioned earlier. This is a testament to our strong customer relationships and our superior distribution network. We also launched a new superior rebar, Tata Tiscon 550SD, for our retail customers. This quarter, we developed 53 new products in India for our customers across segments, including automotive, industrial products and projects, brand new products, and retail. Our ongoing projects at Kalinganagar have picked up steam following a slight slowdown due to the second wave. Our 6 million ton pellet plant and PLTCM is now expected to be commissioned in the Q2 of the next financial year. We are making good progress on our various initiatives to derisk the business. Aashiyana has recorded a 38% quarter-on-quarter growth in its quarterly gross revenue, while services and solutions witnessed best ever operational performance in the Q2 of FY 2022. Our steel recycling and new materials businesses are also growing well. In Europe, our economic activities and steel consuming sectors are witnessing recovery while the automotive sector is impacted by the semiconductor shortages. Our steel production in Europe declined by about 4% quarter-on-quarter due to some temporary operational issues at both the Netherlands and the U.K. steelmaking sites. Steel sales volume declined about 8% quarter-on-quarter to 2.14 million tons in the September quarter, but better product mix improved our underlying performance sharply. Koushik will further elaborate on our financial performance there. European steel prices are expected to remain resilient with continued supply tightness, though we remain watchful of the surging power and energy costs, especially in the U.K. I'm happy to say that the merger of Tata Steel BSL with Tata Steel has been approved by the Honorable NCLT Mumbai bench, and the appointed date of the merger is April 1, 2019. We continue to progress on our ESG commitments, and we recently commissioned a 5-tonne-a-day carbon capture plant at Jamshedpur. We also started increasing our scrap charge in our operations across sites in India. In Europe, we've announced our plans to pursue a transition over the decade towards a more hydrogen-based route, you know, and a detailed assessment of the same is underway. Recently, we won the high-quality Gandhalpada iron mine, which was situated close to our facilities, to our existing Khondbond iron mine in Odisha, and within approximately 200 km from our facilities in Jamshedpur, Kalinganagar, and Angul, and it's next to the Kalamang iron mine which we got along with the Bhushan Steel acquisition. This is another step towards our raw material security beyond 2030. With this, I hand over to Koushik for his narrative. Thank you, Naren. Good afternoon to all of you. Hope you and all your loved ones are safe and getting vaccinated. As mentioned by Samita, the Tata Steel standalone numbers have been restated from April 1, 2019 to reflect Tata Steel BSL's merger into Tata Steel. However, as the business model for TSBSL is slightly different from Tata Steel, with more downstream and 100% purchased coal, et cetera, the Q2 numbers for standalone, including Tata Steel BSL, are not a simple extrapolation based on additional volumes that you will need to tweak your models a bit, and we can discuss that later. Coming to the performance, continuing with our strong performance in the last two quarters, our consolidated financial performance for the quarter was again strong on the back of underlying business performance across geographies, despite the impact of the sharp increase in coking coal prices and additional royalties to be paid in India on iron ore with the amendment in the MMDR Act. Our consolidated revenue increased during the quarter by 13% quarter-on-quarter and 55% year-on-year to INR 60,283 crores. We have achieved a new highest ever quarterly consolidated EBITDA of INR 16,618 crores, which reflects a margin of 28%. The consolidated profit after tax was also one of the highest at INR 12,548 crores with a net profit margin of 21%. Our India operations, which include restated standalone and the Tata Steel Long Products, generated revenue of INR 34,220 crore, supported by increase in steel prices and higher deliveries. We achieved highest ever quarterly adjusted EBITDA of INR 13,877 crore during this quarter. The Tata Steel standalone revenues increased by 18% quarter-on-quarter and 51% year-on-year to INR 32,582 crore with the benefit of strong steel prices and higher deliveries. The Tata Steel standalone also achieved the highest ever quarterly adjusted EBITDA of INR 13,574 crore with a 4% quarter-on-quarter and 133% year-on-year growth. Can I request others to mute the mic, please? I think there's some disturbance. Thank you. This translates into an EBITDA margin of about 42%. The operations generated free cash flow of more than INR 4,300 crore in the Q2 of this financial year. Based on the commentary that we've been seeing this morning, it appears that the India performance needs some deeper explanation, which is partly because the Q2 numbers needs to be seen beyond simple extrapolation. Let me add a few points on this. In Q2, the overall net realization, which is standalone plus Tata Steel BSL, increased by about INR 3,400 per tonne quarter-on-quarter against our earlier guidance of INR 3,000 per tonne. Coming to revenue per tonne, in Q2, the revenue per tonne for combined for standalone plus Tata Steel Bhushan increased by about INR 4,550 per tonne quarter-on-quarter to about INR 73,700 per tonne, which is higher than many of the consensus estimates that I've seen, primarily by an increase of about 4,350, which is what was seen earlier. Tata Steel BSL, the overall revenue increased by 6% quarter-on-quarter, i.e. about INR 450 crore driven by higher prices, partially offset by adverse mix impact due to higher slab sales on account of operational issues and lower exports. For the standalone inclusive of Tata Steel BSL, the Q2 costs were higher by INR 4,850 crores on account of a couple of factors. Let me talk about them one by one. The total raw material costs, excluding the impact of change in inventory, which increased by about INR 1,800 crores on quarter-on-quarter basis, primarily due to a INR 750 crores increase in coal consumption costs with higher prices and higher consumption of imported coal. By about INR 400 crores increase in the consumption of purchased pellets that we did, more specifically in TSBSL. As a result, on a per tonne basis, the total raw material cost per tonne increased by about INR 3,600 quarter-on-quarter. Secondly, there was about INR 1,600 crores on account of higher royalty and taxes, which is reflected in the other expenses. Of this, about INR 1,200 crores is on account of MMDR amendment, of which about INR 320 crores is actually a pass-through. So TSLP takes about INR 219 crores and Tata Metaliks takes about INR 198 crores. For TSBSL, the additional royalty was about INR 510 crores, and which will no longer be relevant as we go forward. For Q3, the outflow on account of Tata Steel BSL, which is a run rate of about INR 100 crores per month, will not be there on completion of the merger. In addition, TSLP performance was weaker than expected due to lower DRI sales and higher material costs amidst the higher royalty, and higher iron ore and coal costs. I hope that clarifies to some extent the movements that everybody was expecting. Moving to Europe, our revenues improved to about GBP 2.1 billion during the quarter, with the increase in the market prices getting translated into the profit and loss account. The reported EBITDA for the quarter more than doubled to about GBP 328 million on a quarter-on-quarter basis, with higher steel prices and better mix, which was partially offset by increase in the raw material costs, especially coking coal and certain increase in the energy cost. This is after a charge of GBP 32 million for the CO2 emission rights. There is also a INR 13 million one-off credits. The underlying EBITDA was around INR 315 crores. INR 15 million, sorry. We had INR 1,192 crore Forex revaluation in the Q2 on account of the adverse movement in the FX on account of the external and internal company debts versus INR 293 crores in the Q1, which was a gain. Our CapEx is being prioritized on value-added expansion, as Naren mentioned, including Kalinganagar and strategically essential investments. On a consolidated basis, we have spent about INR 4,200 crores in the H1 of this financial year. So far, our total spend on Kalinganagar is about INR 7,850 crores. As mentioned previously, our financial year 2022 consolidated CapEx guidance is around INR 10,000 crores-INR 12,000 crores. The operating cash flows continue to be strong despite working capital pressure due to price effect on coal, in coal price increase in recent months. Besides this, the quarter also witnessed major cash outflows in the form of tax, which was about INR 4,223 crore and dividend of about INR 3,000 crore. Despite this, the company generated consolidated free cash flow of over INR 3,300 crore during this quarter. Just to repeat, as part of our enterprise strategy, we continue to deploy the free cash flow for deleveraging the balance sheet with about INR 11,400 crore of debt repayment in the H1 of the current financial year. We are certainly targeting additional aggressive deleveraging in the H2 as well. Our net debt to equity has further dropped to about 0.79x, while the net debt to EBITDA improved to about 1.2x. Our group liquidity position remains strong at about INR 20,000 crore, including about INR 9,300 crore of cash and cash equivalent. At the start of this financial year, we had set a target of achieving the investment grade financial metrics, and I'm happy to state that this has been achieved in the H1 of this year. We are happy to also note that Standard & Poor's has upgraded Tata Steel to investment grade of BBB-. In line with our strategy to exit non-core markets, we successfully divested our 100% holding in NatSteel Singapore at the end of this, the previous quarter, which is Q2, to realize about INR 1,200 crore that has resulted in a realized gain on divestment of about INR 720 crore for the quarter, which has been accounted for. With this, I will end my comments and open the floor for questions. Thank you. Thank you very much. Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Amit Dixit from Edelweiss. Please go ahead. Yeah. Hi, good afternoon, and congratulations for record EBITDA in Q2. I have a couple of questions. The first one is on coking coal cost. What was the coking coal cost in P&L in Q2, and what increase do we expect in Q3? Amit, the increase from Q3, I mean, from Q2 to Q3 in coking coal cost for India will be roughly about $100 a ton. Okay. For Europe, I think it's going to be about EUR 55 a ton. Okay, that takes into account the partial security we have. Yeah. Okay. The second question is essentially there is, in standalone, cash flow statement. There is a loan given of INR 16,547 crores. Just wanted to understand, I mean, which entity we have given loan to and, when it is expected to be repaid. Amit, this is actually part of our deleveraging strategy. We've been prepaying our overseas loans. What you see is essentially funding to repay or prepay the loan in the senior facilities agreement in Europe, which we want to pay off and that's been our focus as part of our deleveraging. Because India balance sheet doesn't have that significant loan and there are some bonds outstanding, et cetera. We are essentially focusing on the overseas loan, and then we will come back and see what we can reduce in India. That's the amount that you see as invested as given as loan. Okay. That helps. Thanks, and all the best. Thanks. Thank you. The next question is from the line of Prateek Singh from DAM Capital Advisors Limited. Please go ahead. Sir, good afternoon, and thanks for the opportunity. Sir, on in terms of this, I have two questions. The first one, sir, in the H1, we have generated strong operating cash flow, out of which about INR 125 billion-INR 130 billion have gone into working capital increase. How much of that and what is the roadmap for that to unwind, sir? What needs to happen for that to unwind, sir? Effectively, during the H1 of this year, what you would see is that the working capital build up essentially on account of prices, which is both from finished goods prices and raw material prices in India on the coal, increase in Europe on coal and iron ore and also the finished goods. The number of days is still contained within the range that we have. What has happened is the price effect, which has come in. What we are trying now or what we will be focusing on is to reduce and optimize on the holding days, and that should start reversing from the Q3 onwards. We have a challenge that coal prices have increased even more. I think we will be essentially focused on releasing working capital from the Q3 onwards, so that it will not happen all in one quarter. It will take some time, and there's a huge optimization on the holding days, the quantity, because it's also important to ensure that we have sufficient inventory for running operations comfortably. You would see some reversal from Q3. Understood. Sir, second question. Sir, I just wanted to know your thought process broadly on the aspect of does anything, any covenant or does any regulation forbid us from doing a buyback? No. There is no covenant or regulatory issue that stops us from doing buyback. Okay. Sir, My question is coming from the context that, you know, given the cost of debt is quite low, particularly in overseas and even in India now. Is it not a good idea to consider a buyback? Just quickly outline that. I'm sure at some point in time the board will look at it and look at options for better returns for shareholders. At this point of time, I don't think we are yet in the zone of debt levels where we can not pursue the deleveraging. I think we have some roadmap to go forward in repaying the debt. It's important for us to continue to be fitter from a balance sheet perspective, and I'm sure at some point in time other options will certainly be looked at. Okay. Understood. Thank you. Thank you. Thank you. Before we take the next question, a reminder to all the participants. Please limit your question to two per participant. You may rejoin the question queue if you have a follow-up. The next question is from the line of Pinakin from JP Morgan. Please go ahead. Yeah. Thank you very much. Sir, two quick questions. First is, if you look at the H1 EBITDA, INR 1,000 crore broadly in each quarter. Q2 had bunch of one-offs, which some of the royalty expenses will not recur in H2. Now coking coal prices have surged, iron ore has fallen, steel prices are broadly steady. Into the H2, how should we look at performance on a consolidated level? While margins could come off, volumes will be higher. Can the H1 EBITDA run rate at a consolidated level be maintained in the H2, given what visibility we have on steel prices, cost and volume? Pinakin, I think that's what we're chasing. There are few things which look better in H2 and few things which look worse. But overall, I think on the positive side, we expect demand in India to be better in H2 than H1. Second thing is the iron ore prices coming down will help us certainly in Europe. The third thing is in Europe, because Section 232 issues have been sorted out with the U.S., there are options beyond Europe for our European business. Fourthly, we expect the semiconductor issues to be better in the H2 than in the H1. In India, we are already seeing improvement in commercial vehicles, et cetera. There are a number of aspects which we are seeing as positive. What we are watchful about is, increasing COVID cases in Europe and in China and whether that will have an economic impact. The second is of course we are watching what's happening in China, but I think what we've seen is China's cut production every month, you know, month on month. That's why exports from China has not been a disruptor so far, and we don't expect it to be a big disruptor, going forward. Energy costs in Europe are also something we are watching. That's why it's a bit of a mixed bag. Yes, as you said, the volumes should be better in the H2, and we'll have some opportunities to improve spread, particularly when the iron ore prices soften a bit, though we will have a little bit of an impact of coal bought last quarter flowing into this quarter. Yeah. Sure. Just to clarify further, is it fair to say that H2 Europe should be better than what the Q2 is, though India margins could be a bit softer? H2 Europe will be better than H1 because as you know, Q1 Europe was not good, right? Now we are seeing the spread stabilize to the levels that we want it to be. We will also see some of the new contracts coming in for Q4, because a lot of the packaging and automotive contracts which have been renegotiated or being renegotiated will start kicking in in Q4. Yes, Europe should not see a deterioration and we think that things will improve a bit. Understood. Lastly, consolidated interest came off very sharply. What should we look at as a steady state interest cost as the company keeps on repaying debt? Pinakin, I think during this quarter, we had a reversal of about INR 260 crores of interest provided for previously because the merger with TSLP was not approved and therefore we were taking in the tax impact of the same, the tax losses. If you're not paying advance tax, then you have to account for it as a penalty, which has got reversed in this quarter. If you gross it up by INR 260, then that is broadly the level that we continue. Once we are repaying, as we are repaying progressively, it will step down uniformly across the next few quarters. Understood. Thank you very much, sir. Thank you. Thank you. The next question is from the line of Sumangal Nevatia from Kotak Securities. Please go ahead. Yeah, good afternoon, and thank you for the opportunity. First question, just continuing on the Europe part. First, if you could just give some more details into pricing. I mean, we've seen steel prices softening, but at the same time we will benefit from the contract reset. How should we see realizations in Europe in the coming quarters and whether it peaks in 3Q or 4Q? I think basically Q3 we expect in the Netherlands the prices to be about EUR 50 better than Q2. In U.K. about 45 pounds better. Pretty much close to similar EUR 50, EUR 55 better in Q3 than in Q2. Q4 we are still in the process of negotiating some of the contracts, et cetera, so I won't give a Q4 guidance just now. You know, certainly we are hopeful that we can keep improving on it because we also have this issue of energy prices in Europe that we need to keep an eye on. Many steel companies in Europe have already talked about the need to cover that through price increases. Understood. With respect to cost, iron ore versus coking coal and versus energy, I mean, how do these three costs move in the next quarter or so in Europe? Europe, the coal costs will be about EUR 55-EUR 56 higher in Q3 over Q2. Iron ore cost should be EUR 30 lower in Q3 over Q2. Understand. Yes. My second question is with respect to a recent iron ore mine bid where we won at a very huge premium. I just want to understand it. It's a change in stance to what we've been quite conservative in the past auctions. Given that we have a captive iron ore from a couple of years left, I mean, is it possible to share some rationale and thoughts on that? Sure. You know, as you rightly said, we've been very careful about what we bid for which mine. There are a few things which attracted us to this mine. Firstly, it's a 350 million kind of reserve, so it's a big mine. We prefer big mines because it's much easier to drive efficiencies there. Secondly, it's a low alumina ore, you know, which is very important in India because Indian ores are typically high alumina, whereas this is 2.2% alumina. This becomes even more critical when you're looking at lower carbon footprint because the higher the alumina, the carbon footprint in production is higher. Going forward, we feel low alumina ores will be even more valuable than any iron ore. That was the second reason. The third reason is this is adjacent to the Kalamang mine which we got with the Bhushan acquisition. That also has about 100 million tons, and that is also available with us for the next 30 years-50 years or so. If you look at Kalamang and Gandhalpada together, again, we can extract a lot more value than anybody else because they are adjacent mines and adjacent mines give significant benefit because you don't have to waste ore at the border of these two mines. Fourthly, this gives us a good stable supply beyond 2030, and that allows us to invest in slurry pipelines and other infrastructure that is required, where for existing mines we are constrained by the fact that we don't know the situation after 2030. Finally, this is a greenfield mine. We have no obligation. If you acquire an existing operating mine, you have to produce that same volume or around that volume, otherwise you end up paying penalties. Since it's a greenfield mine, we can develop it at a pace that works for us, that's convenient for us, and time it well for our transition in 2030. Finally, having Kalamang, Vijaya II mines of TSLP and Gandhalpada, we are in a comfortable position to pick and choose what we want to bid for in any new auction. I think strategically it sets us up very well, and that's why we bid the premium we did. Thank you. That's very elaborate. If I may just squeeze in one last question. Now this royalty outgo because of the MMDR amendment for our subsidiaries, Tata Metaliks Limited and Long Products, looks to be permanent, at least the next couple of years. Is it, I mean, given that it is a very substantial portion of the profitability there, does it make sense now to run it as a separate company or we may evaluate combining everything under Tata Steel? We are exploring all options. This is a more recent development, so we are exploring all options. For TSLP, we also have an existing mine which is part of TSLP, which is the Vijaya II mines. You have an option there to serve the requirements. We cannot fully fulfill what is required. We are exploring all options, and we will discuss at the Tata Steel board and the boards of those companies before we decide. Okay. Thank you and all the best. Thank you. Thank you. Thank you. The next question is from the line of Amit Murarka from Axis Capital. Please go ahead. Yeah. Hi, good afternoon. Just my question is on the carbon credits. Could you just explain the CY 22, CY 21 carbon credits position? Like, are we on track or will some further provisions need to be made? On the carbon credits, Amit, there is no movement on the credits. All that has been done in the Q1. We have also got our allocation, which is banked and kept with us and there is no change at this point of time from our underlying perspective. Another allocation will come early part of 2022, and we will be in compliance with the requirements. I don't see anything going forward on that. There are certain hedges we had taken on which there are some non-cash provision that has been taken, but beyond that, there is nothing on an underlying basis, and the credits will continue to be banked and used for compliance purposes. In Netherlands. Sorry. No, please go ahead. That is where it stands from a Tata Steel U.K. Perspective. In Netherlands we continue to get free allowances and comply with the same. Strategically and operationally, we are not essentially going to get into any trading position in the future. Okay, understood. Also just on the like longer-term objective of reducing the emissions footprint, and you've mentioned in your release about pursuing the hydrogen route in Netherlands. Could you just share some more details on that and by when you think you'll move ahead on this project? Amit, basically in Europe, as you're aware, EU has set itself some goals and the countries themselves have set themselves some goals. There is a plan for the industry, and not just us, to transition to a greener future. That means multiple things. Firstly, different governments are coming up with different structures to support this transition, so that's a conversation we are having both with the U.K. and the Dutch government. Secondly, to make sure that the industry in Europe is not penalized despite being efficient, because our plant in IJmuiden is one of the most carbon efficient in the world, in fact the second best in the world as per the recent World Steel Association numbers. We are seeing the European Union propose a Carbon Border Adjustment Mechanism which makes sure that the transition is supported. Thirdly, we are also seeing greater appetite amongst customers in Europe to pay a premium for green steel. All this, and the fact that there is a carbon price which is already there, which is now at some 65 EUR a ton. All this means that all of us, I mean the industry including us, will have to make a plan for the future, which is what we've talked about. While in Netherlands we were looking at carbon capture and storage as a possible solution, we've concluded that it's better to move towards a gas-based DRI than hydrogen-based DRI as a solution rather than go for a CCS solution, which later we may anyway have to go for gas-based or hydrogen-based DRI. That is what we have said. Over the next 10 years we will transition at least one of the blast furnaces into this process route, and we will plan it and time it in a manner that is supported by policy as well as you know obviously supported by the financial viability of this transition. If I may ask, what kind of state support you expect from this financially? As we said in our release yesterday, we are still working out the details of the cost of this transition, et cetera, because there are multiple process interventions that we need to plan for. Once we have that, then we will have a discussion with the government. The government was supportive of the CCS route because that was the preferred route in the Netherlands. Given our announcement, the government is also exploring what they can do for this process route. I think government has been supportive, but we've not had a specific conversation yet till we've finalized our plans. Do you continue to - I'm so sorry to interrupt, but may I please request you to rejoin the queue for your follow-up? Sure. Thanks. Thank you. The next question is from the line of Satyadeep Jain from Ambit Capital. Please go ahead. Hi. Thank you. A couple of questions. On Europe, can you talk about your energy exposure given the rising energy prices in the upcoming winter? You also supply, I believe, waste steam that goes to the on-site hydrogen plant in the U.K. also. Given the talk about energy surcharge that is going on in Europe, when you look at the cost increase and the possible surcharge, what kind of impact do you have due to spot energy prices there? Typically our energy costs are about EUR 30 million-EUR 40 million a quarter. That's obviously expected to increase, you know. You know, we are looking at it in the EUR 80 million-EUR 100 million range going forward. Now, obviously some of it will be recovered from the customers because it's not just us, everybody else is facing the same problem. I think we are in a better position in Netherlands where we are hedged quite a bit. U.K. is where we have a little bit more of a problem. I think since it impacts everybody, as you said, there will be a move to recover as much of it as possible from the market. Okay. There was talk about some auto customers also canceling some auto contracts. Is that still going on, or has the situation improved somewhat there? I've just heard that. I mean, based on I know one of our peers mentioned that, but we have not heard anything of that yet. I must also say that this is where the U.S. option opening up is a positive for Europe because auto has been taking less than they had planned because of the semiconductor issues. The U.S. market has always been a good market for Tata Steel. In Europe, we typically export about 1 million tons. We have brought it down by 50% over the last few years, but now that's also an opportunity available to us. Just a clarification question to the previous question. On the transition from blast furnace to DRI at Netherlands. Basically the blast furnace would be shut down when it reaches the end of life, and that will move to DRI. That would be the plan. Yeah. Generally the transition, you know, being planned in Europe by multiple people is whenever the blast furnaces reach end of life, you then look at having a gas-based DRI, assuming gas is available. Then later when hydrogen is available in plenty and at a reasonable cost, you substitute the gas with hydrogen. Okay. Thank you so much. Thanks. Thank you. I would now like to hand the conference over to Ms. Shah. Yeah. Thank you. We have a few questions in the chat, which we will just take now. The first question I think is on steel price movement or the NR guidance in India, given the surge in coking coal cost and also the fact that domestic steel prices are now more in line with import prices. I think here the guidance we'd like to give is Q3 prices will be on an average about INR 2,500 per ton higher than Q2 in India. NR, I mean the realizations. Thank you. The next question is, in terms of the volume guidance for the rest of the year, and whether we are on track to meet 1 million tons more in India as well as in Europe, which we had said earlier. Basically, if you look at Q3, I think India will be flat. Europe will be better than Q2. Europe will be closer to Q1. Overall for the year, you know, we are maybe between 1.5 and two million on a consolidated basis. That's the way I look at it. Thank you. The next question, I think a lot of questions around this, whether the iron ore and coal cost mentioned is per ton of ore, or per ton of steel. Just to clarify it is per ton of ore, and not per ton of steel. Some more questions. This one is on TSLP, that with the change in the MMDR Act, going forward, what is the increased royalty payment at TSLP? I think what we've said is roughly for the half year it has been about INR 200 crore. I mean, again, this is dependent on the iron ore price. As the iron ore price drops, this will drop. This obviously INR 200 crore factors in the high iron ore prices of the last six months. You know, for today's iron ore price, I don't know what the exact calculation will be, but that's probably the highest we would be paying. Thank you. Next question, Koushik, you might like to take this, that given the group's focus on deleveraging and Tata Steel's investment grade status, would you also refinance some of the existing U.S. dollar bonds and term them out further? Well, these are all trading at a premium at this point of time, so I think it would be fairly costly to do so. Therefore, we are not looking at refinancing the bonds. We'll let it run past the maturity date. Yeah. I think the question actually is more, I know they've used the word refinancing, but I think the question is would you do a fresh issuance of US dollar bonds? Okay. Nothing at this point of time which is planned. If we do it, we are watching the market and seeing how the trades and deals are happening, but nothing at this point of time. Thank you. One last question which we'll take in the chat before opening it back to the analysts is in terms of the impact of China. China with the kind of changes which we are seeing in steel demand and the production cuts shaping up, what impact do you see of that on steel prices generally and specifically for Tata Steel? I think overall we are seeing China as less of a disruptor through exports. You know, over the last 10 years we were always watchful about Chinese exports coming and being dumped in multiple markets. We are less worried about that now because I think China has exercised great discipline in cutting production month on month. If you look at the World Steel Association forecast, which was made you know last month, basically World Steel Association has forecasted steel consumption will grow at 4.5% globally, and this assumes China has no growth of steel consumption. All this 4.5% is coming from the developed world and developing countries like India. There is a shift in where the growth of steel consumption is happening. Going forward, it'll be led by infrastructure investments in the developed countries and in developing countries like India. Also the regions like the Middle East, Southeast Asia and Africa will continue to grow in steel consumption. Given that, we are watching China more from a point of view, its impact on iron ore prices and coal prices and less about them flooding markets with a lot of exports. Given China's ambition to become net zero by 2060, I think, they've already stated that they want to discourage steel exports over the medium and long term. Less of an impact. Certainly for Tata Steel, you know, we are more leveraging what's going to happen in the domestic market. We are less dependent on export markets. You know, last quarter, two quarters, we were at 16% exports. This quarter we'll be at 12% export, which is close to our long-term average on exports. We are looking forward to the recovery in the Indian market. Thank you. Janice, we'll go back to the analyst questions, please. Sure. The next question is from the line of Ritesh Shah from Investec Capital. Please go ahead. Yeah, hi, sir. Thanks for the opportunity. Sir, two questions. First is on capital allocation and in Europe. We have given a medium-term target of 15% ROCE, and if I remember, the same number is 12% for carbon-adjusted ROCE. Just wanted to put into perspective, you indicated the idea for exploring gas-based DRI eventually going into hydrogen. Will it meet the thresholds what we have stated over here, or is it an option that we can actually deploy equivalent capital probably in India itself, or some other regions globally? That's the first question, sir. Naren, if I can take- Sure. Part of that. Sure. Fundamentally, you know, this transition that is going to happen, first in Europe and then, much later in India, is being looked at from a financing perspective, a blend between the, what the company's internal capital is, between green financing that will be raised, for this purpose, and then the government support on target funding because there are several, funds and schemes that are being floated in Europe. If you take all of these three, and then do the math, then, and if you adjust it for the European cost of capital, I think we will certainly be in a good space. I think that is, our format at this point of time. That's why it's important to get the government schemes and government financing and government-backed, green financing. Over the next couple of years, that is something which is going to be applied on. The 15% ROCE part that you saw or what we talked about in the Investor Day was essentially on deployment in India on the capital allocation for that. I think we are fairly firm on that at this point of time because India transition is not happening in the next few years. It'll take a long time. I think India has just announced the 2070 and new NDCs will come into play for 2030. For which we are ready, and we had already announced that we will be, our intensity will be 2 tons of carbon per ton of crude steel by 2030. We're sticking to that. We are also going to look forward at some point in time how green financing will help us in that transition even in India. That's broadly the perspective. It's, if you look at it, short and medium term of 15%, it certainly holds and our capital allocation certainly is measured against that. Great. That's quite useful, sir. Sir, my second question is you indicated about the discipline on Chinese exports, which is encouraging. Sir, how should one look at Chinese export pricing, which has been declining one way? What would you infer out of it for local pricing when one looks at it on import parity? Secondly, for our export shipments, pricing could again be under pressure just because of Chinese export pricing being lower and the fringe shipments potentially impacting how we price our shipments. How should one look at this? Thank you. You know, it's only in the last maybe a week or so that some Chinese exporters have been a bit aggressive in Southeast Asia and Turkey, etc. You know, China is still buying coal at $550, you know. $600 coal has come down to $550. At $550 coal, you know, there's only that much you can drop prices by. That's something which we need to keep in mind. Secondly, what we've seen even in the last one year is when exports goes up, the Chinese government changes the rebate structure to discourage exports. You know, because they are really not wanting China to import iron ore and coal, leave a carbon footprint behind and export steel. We are seeing that that is being tracked very closely. Normally winter months, there are production cuts as well. You know, so I think for multiple reasons, we are less concerned about Chinese exports now than we were, let's say, three years back or five years back. Sure, sir. That's very helpful. Thank you so much for the answers. Thank you. Thank you. The next question is from the line of Hitesh Arora from Unifi Capital. Please go ahead. Thank you for the opportunity. I just wanted to understand what's the outlook on coking coal prices, you know, especially when you speak to Australian miners and what's been happening around the world. What are your thoughts on coking coal prices? When do we see them normalizing and how? Hitesh, there are a couple of things happening, right? Firstly, China is not yet buying coking coal from Australia on a regular basis. I think they cleared some of the shipments which are stuck there, but largely they are not buying as they used to before. That's why China continues to buy coking coal at a higher price than is available to the rest of us. They're buying largely from the U.S., Russia, Mongolia, et cetera. As far as India is concerned, India has now become the biggest importer of coking coal in the world, or the buyer of coking coal, importer of coking coal. I think that's more accurate. We buy from Australia largely. Now, Australia, there are not too many options on supply, you know. For the good quality coal, there are a few suppliers. They've also had their own challenges. That's why the coking coal prices out of Australia has still been reasonably stable at $380-$400. We don't see it dropping significantly. We see it more in the $350-$400 range for some time, because it's not a very liquid market, and any small interruption, any weather disturbance, et cetera, pushes up the prices. With steel production growing in the rest of the world, including in India, the demand continues to be quite strong. I expect coking coal prices to be in the $350-$400 range, at least for this quarter and next. Understood, sir. Thank you. Thank you. Thank you. The next question is from the line of Ashish Jain from Macquarie. Please go ahead. Hi, sir. Good afternoon. Sir, I have two questions. Firstly, you know, your comment that you just made on coking coal, and given our guidance for 3Q, does it mean that 4Q onwards is another $100 impact left to be reflected in our financials from a coking coal point of view? No. I think we peaked as far as the buying price is concerned, and we'll be pretty much there. We don't see any further increase in Q4 unless coking coal prices again shoots up, you know. Okay. Got it. Sir, second thing, sir, if you can clarify on the carbon cost impact in Europe that we had in 2Q. I missed that comment. What is the outlook for carbon cost in the H2 in Europe? Koushik? What I mentioned is that there has been no trading of carbon emission rights in the Q2. We had repaid our obligation or settled the obligation in the Q1 of what we sold in the previous year, when the COVID crisis was at peak and we liquidated some of our carbon rights. Right. All that I mentioned is our going forward, our position is not trading in the ordinary course of the business. We have banked what we have got as free allowances, and those free allowances are kept for compliance purposes. That was my point. I'll the last point is that there were some hedges on account of on the account of the CERs, and some non-cash provisionings have been made in this quarter and which will ease out in the coming quarters. Got it. Sir, Koushik, we still remain on track to levy, you know, carbon-related surcharges and all after the first, you know, EUR 12 number that we have put, and what's the feedback and, you know, acceptance of that? Is there a case to think that that number can be raised further? That is what we had put in. We were the first to put in. Now the others are also doing something similar. That sticks. We have a formula by which we calculate that. You know, based on our allowances, the carbon price, et cetera. Just now we've not felt the need to revise it, but if the carbon prices go up any more, then, we will certainly revisit it. Just to add, it's also linked to what our exposure is to external carbon purchase, and that's so it's a fairly calculated approach towards it. Okay. Got it. Got it. Thank you so much. Thank you. The next question is from the line of Indrajit Agrawal from CLSA. Please go ahead. Hi. Good afternoon. Thanks for the opportunity, and congratulations on a good set of numbers. I'd just like to understand the Indian steel trade environment that you're seeing currently. We have seen the domestic market, the demand slightly picking up, but export prices falling off the cliff. Along with that, our quota to export to Europe has been exhausting. Do you think more material gets diverted into India, given that Indian prices are now at maybe in line with or a slight premium to import parity? Does that put pressure on domestic steel prices? From a Tata Steel point of view, we were exporting 16%, we'll export 12%. It's not that we have to sell a lot more volume in the domestic market. I think we are comfortable selling what we need to. If you look at some of our peers, yes, they've been exporting more. They probably will sell more in the domestic market. We expect H2 demand to more than offset this diversion. As of now, there is no real imports coming in either. To that extent, I think the Indian market in the H2 should be able to absorb any diversion being done by the industry from exports to domestic markets. That's the way we see the situation. Sure. Thank you. That's helpful. One follow-up actually from previous participant. Just to understand, after the $100 per ton increase that we are likely to see in coking coal in Q3, we will be closer to market price or what is the current spot price are or, that's how we should No. Normally we look at what is the price we buy and the consumption, how it flows through. What we are giving guidance is based on what is already contracted and in place. Normally we have two to three months of inventory also in the system. I think there's also, you know, it's very difficult to correlate it exactly to the market price because all of us buy different blends. One of the virtues that we think we have is that we are able to make do with a good blend, the most optimal blend. That's a very technical subject where we look at what is the most value optimal blend that we can use. It won't be easy to correlate $400 with this. When we tell you $100, this is factoring in the blends that we use, et cetera, et cetera. Sure. That's helpful. Thank you. Thank you. The next question is from the line of Rajesh Majumdar from B&K Securities. Please go ahead. Yeah, thanks for the opportunity, sir. Sir, I just wanted to know, there is an increase of about INR 4,000 crore in the other expenses on a quarterly basis, on the consolidated numbers, and you accounted for about INR 1,000 crore on account of royalties and about INR 1,192 crore on account of FX. Now, what is the balance INR 1,800 crore on account of? Just give us a minute. Koushik, you want to take it? Yeah. I'm asking one of my colleagues, Sanjiv, to explain. Yeah. Sanjiv? Yeah. In addition to the two items that you explained about royalty and FX, there are other expenses like around INR 300 crore higher expenditure in Europe because of energy and repair and maintenance cost. Similarly, there is an increase in expenditure in store consumption and repair and maintenance in Tata Steel also, which we did not mention in the point that you just elaborate two major points. Also in other subsidiaries like TSML, which is also having a higher expenditure this quarter, around INR 159 crores. Other than those two, these are the three, four major items around INR 200 crores each, which has contributed to that increase that you are seeing in the other expenditures. Right. Some of these are basically going to be recurring, right? We will see a higher other expense curve going forward. You know, just to clarify, some of these are recurring, some of these are not. You know, if you see sort of the bulk of the expenditure, you know, so INR 1,100 crores, which is FX, really depends on the FX movement, you know, across currencies. You can't really say it's recurring. If you've tracked our results, you would see that sometimes it's a gain, sometimes it's a loss. You know, that keeps changing. In terms of the increase in royalty, which we talked about INR 500 crores we've incurred this quarter on account of BSL will no longer be there because now with the merger, we don't have to pay that. Some of these are not recurring and some, you know. I wouldn't say that they are all recurring. Right. Those two big expenditures that you mentioned, those are not. They are non-recurring. Other small repair and maintenance, those are. Depends. One more item which I forgot to mention is there was an MTM loss of around INR 400 crore. Broadly, these are the breakups of the movement between last quarter and this quarter. Okay, thanks. My second question was, the company's probably going for a maintenance shutdown in Q3 in the domestic operations. Is that correct? I think, somewhere we mentioned that hot strip mills have some shutdowns, but those are regular, short shutdowns. Nothing very major. That's why our Q3 volumes are similar to Q2. Right. There won't be any significant drop in production? No. Okay. Thank you. Thank you. Thank you. The next question is from the line of Bhavin Chheda from Enam Holdings. Please go ahead. Yeah, good afternoon, sir. Sir, you mentioned that, Europe operation- I'm so sorry to interrupt. May I please request you to speak a bit louder, sir, so that your audio is clearly audible. Is it clear now? Yeah. Yeah. Sir, you mentioned that Europe used to export 1 million tons to the U.S., which was down by 50% earlier due to the tariffs imposed by the U.S., which is not there. So you're saying that Europe operations will have that opportunity to increase exports, one. And second is now, since you are already exporting, there was some tariffs in the U.S. which won't be there, so your profitability for exports to the U.S. would improve going forward? Couple of things. You know, we sell multiple steels to Europe, I mean, to the U.S. from Europe. One is the packaging steels, which actually what we supply was not being made in the U.S. I think as far as I remember, there the permissions were taken by the customers to allow us the exemptions and that's why we used to sell. What dropped is largely the exports that we used to do to the engineering segment in the U.S., which is what shrunk over the last three years because of this Section 232. We have an opportunity to go back into those markets because, as you know, the prices in the U.S. are higher than the prices in Europe, and we have some good equity with the customers there. It allows us an opportunity to sell more into the U.S. in segments, which we had vacated over the last couple of years. Okay. Thank you. Thanks. Thank you. The next question is from the line of Ashish Kejriwal from Centrum Broking. Please go ahead. Yeah, hi, good afternoon. Just two clarifications. In one of the questions, Koushik mentioned that we have done some hedges and non-cash provisioning in Tata Steel Europe in Q2, which will release in Q3. Is it possible to quantify and whether that is included in EBITDA numbers which we have quoted? Hello, can you hear me? Yeah. We can hear you. Those non-cash provisions are currently in the OCI and not in the main financials, and that's how it will remain. It's not included in the Q2. Okay. Secondly, sir, in terms of coking coal cost, which we mentioned that incremental cost will be $100 per ton. Is it possible to mention what could be the coking coal cost per ton of steel? Because we are using different plants, you know, input-output ratio could be different. Again, it depends on the blend. In different plants, it's different costs. We also have in some plants we use more of our own domestic ore, which is at a very different cost. It will be difficult to give you one single number. Typically coal costs are 40% of the overall cost, just to give you a sense. If you want a more precise number, I'll ask Samita to- Yeah. You know, it's the max which you'll have to do because this is just the cost of purchased ore. As you know, we have our own ore as well on the coal side. Sure. You know, it'll be a combination of that, and it actually changes quarter by quarter depending on how much we use of purchased own coal, which is also a fact, you know, and an operating decision really. Sure. Is it possible to share what it was in Q2 or whatever number you can share? No, we don't really get into these details. Okay. Because it will change every quarter, you know. Roughly we are at about, you know, 20%. At a very broad number, it's about 20% of our own ore and the balance is purchased. Sure. In India. Sir, lastly, are we seeing any risk of decrease in steel prices in India because now we are at higher than the import parity basis? I think, for now, I think the demand pickup is expected to be strong in H2. That is one. Secondly, while just now we may be above import parity, but even if somebody decides to import today, it's going to take two to three months for it to come. Right? Even some of the offers you're hearing about is for January and February shipment in Southeast Asia and Turkey and places like that. I don't think this is gonna have an impact in India, at least for the next, this quarter and next quarter. Sure. Thanks on all of it. Thank you. The next question is from the line of Pinakin from JP Morgan. Please go ahead. Thank you very much, sir. I was just trying to understand that while you have mentioned a lot on the European blast furnace to DRI and hydrogen. At this point of time, sir, when does the campaign life blast furnaces end over there? I mean, trying to understand the timeframe at which the decision would have to be taken. There are two things to consider. One is the timeframe of the blast furnaces life, and the other is the timeframe in which you have gas and other facilities available to make the transition. There are two blast furnaces in operation in Netherlands, one which is due for a relining in three years and another which is due for a relining maybe after a few more years. We will time it. It just now doesn't look like the infrastructure, the supplies and everything else will be ready for us to time it with the immediate relining. The subsequent relining is probably you know after 2025 is when we think the timing will be better. Sure. Just to understand this point better, will Tata Steel take a decision independent of what others are doing in Europe? Because given the experience with gas this year, if somebody was on a gas-based DRI in Europe versus a coking coal-based blast furnace, the cost structures could have been very different. Or would Tata Steel take a decision in Europe based on what the peer set is taking? Absolutely. I think, obviously we will, you know, look at the economics of it, and that's why the conversation with the government is also important because this transition cannot be done in isolation. There's no point making this transition if the costs are, very different from existing process routes, and is not supported by the government. Because ultimately the business has to be viable through the transition and after the transition. We will, you know, evaluate all that before we take that final call. I agree with you that today's gas prices don't suggest, that even today's carbon price can bridge the gap, but things are evolving. Understood. Thank you very much, sir. Thank you. The next question is from the line of Ritesh Shah from Investec Capital. Please go ahead. Yeah. Hi, sir. Thank you for the opportunity. Sir, just wanted to check on the CapEx breakup, which you indicated INR 10,000-INR 12,000 crore. If you could give broad numbers between India and Europe. Specifically for Europe, just wanted to understand, there has been a new project which has been announced called Roadmap Plus. Roadmap Plus. Yeah. Right. Is this something which is already included or is it something over and above that? Currently that Roadmap Plus spend is not much, and the overall multi-year spend is about INR 300 million. What you see currently is largely the sustenance and critical CapEx in Europe. Nothing major on any of the decarbonization CapEx. Over the next three or four years actually it will be spent on the Roadmap Plus, which is essentially on reducing the environmental load on multiple projects. Not one project, it's multiple projects. Thank you. Sir, second question was, the loans which we have given to the overseas entity, how should one look at it? I'm just looking at it in conjunction with our earlier commentary that we won't be lending or deploying much capital or we won't be deploying any capital into overseas assets, specifically Europe. If one had to put just two variables together, sir, how should I understand it? I think we, you know, The point that was made is we don't want to put additional capital into the business of Europe. The balance sheet is one, right? The balance sheet, whatever debt is in Europe or Singapore or India is all in the consolidated balance sheet. If you are going to do de-leveraging and de-risking of the business as such, then it includes, essentially taking off those loans from the balance sheet. That is the point. Accounting wise, it is, it has to go through a certain route via the holding companies, et cetera. Fundamentally it is money for de-leveraging. It's internal capital or internal equity being used to reduce external debt. Correct. Sir, just one clarification. 15% ROCE, what you indicated, you stated it's only for India, right? Yes. Yes. Okay. I mean, if you look at the European cost of capital and the return levels are very different. That 15% ROCE, because incremental capital investment, the heavy lifting of that capital will largely be in India for growth. Okay. Perfect, sir. Thank you so much, and wish you good luck. Thank you. Thank you. Before we take the next question, I would now like to hand over the floor back to Ms. Samita Shah. Thank you. We have some more questions on chat, so we will just take a couple of questions before we end the call. The first question is on the recycling plant, which we've announced in India. It says, "Can you provide an update on the 5 million ton recycling plant?" I don't think it's one plant, but if you could- Basically the first plant is 500,000 tons, which is already commissioned and operational in Rourkela, and is functioning, and I think it's working well. We had basically said that over the next few years we want to set up 5 million tons of recycling capacities. It will be multiple plants. You know, we are looking at sites in Western India and Southern India. Basically the thinking is in North, West and South, where there is scrap available, we will set up such facilities. Over the next few years we will do more of these plants. Thank you. There is a next question which is about investments into renewables. Is it a cheaper CapEx option than your current power plants? In a steel plant, there are multiple points to be kept in mind. A lot of our power plants are run using gases which we generate from the process. That's pretty much the best option available because otherwise those gases would be flared, right? That is one. There's only a smaller part of it which is using coal. And even that coal, a lot of it comes from the tailings and middlings, which are basically the lower quality coal which is generated when we mine metallurgical coal. When we look at renewables, we look at supplementing what we have. And second point is to run a steel plant, you need a lot of peak loading. You know, energy is not a steady load, so you need... Renewables cannot fully substitute because then you need to have storage facilities which are not available today at scale to help with the fluctuations of requirement in a steel plant. Renewables will be a component of it, but cannot replace you know this totally. Thank you. There is one question which actually I think is more addressed to Tata Sons, but I will take it since multiple people have asked. Does Tata Sons plan to increase promoter stake in Tata Steel? I think you'll have to ask Tata Sons that. Yeah. With that, we will just take. I think there are a couple of more analysts left, so we'll just take those questions before we close the call. Back to you, Janice. Thank you. The next question is from the line of Sumangal Nevatia from Kotak Securities. Please go ahead. Yeah, my questions are answered. Sorry. Thanks. Thank you. The next question is from the line of Kirtan Mehta from BOB Capital. Please go ahead. Thank you, sir, for the opportunity. On the recycling Rohtak plant that you have mentioned, could you tell us at what volume level it is operating and what is the sort of a cost of operation as well as the margin at that particular plant? Currently, I mean they've just started. They started in the sense they started part of the plant last year, but the commissioning engineers couldn't come for the shredder. They've just come and commissioned the shredder. I think so far in the last few months we've done about 60,000 tons. I'm not. It's positive margin, but I'm not remembering the exact number. You know, but basically more than anything else, I think, we are looking at scrap as being as strategic an input as iron ore is over the next few decades, and that's why we are investing in this value chain. Right, sir. The second question was about the European business. What is the current cost of break-even in the European business and what is the progress on the cost initiatives and how would that impact the break-even cost going one year or two year down the line? I think basically, you know, when you look at the break-even cost, obviously a lot of the costs are the input costs. You know, we have to look at it from that perspective. The way we see it is, the Netherlands business has always been EBITDA positive and, you know, 99% of the time cash positive. Largely the Netherlands business is pretty much able to stand on its own. The U.K. business is where we've had a challenge, but the U.K. business has been, either slightly negative EBITDA or positive EBITDA over the last few years and now moving more and more to positive territory. Hopefully by the end of this year we will be cash positive as well. I think that's the way we are looking at it and, we manage it from that perspective. Sure. Just sort of to understand this further, but a couple of quarters back you had mentioned around INR 220-INR 250 as sort of a break-even cost, and then you had outlined the initiatives of around taking out INR 3,000 crore of costs. Yeah. Is there any change around this or is there any status update on the same? No. I think, okay, what we said is when we look at the long-term viability of these businesses we take a spread of GBP 225 per ton, EUR 225 per ton, right? That's the long-term spread that we plan for. Obviously, spreads today are much higher. When we look at the competitiveness of those businesses we say that if we assume a EUR 225 spread, are we cash neutral or cash positive? All our transformation programs are looking at that. Today's spread is much higher. If you look at it from that point of view, yes, you know, 225 would be the long-term spread on the basis of which we want to be viable. Sure. Thank you. Thank you. Ladies and gentlemen, that was the last question for today. I would now like to hand the conference back to Ms. Shah for closing comments. Yeah. Thank you. Thank you everyone for your participation and your engagement. We look forward to being in touch, and we will meet again in this forum next quarter. Thank you. Thank you. On behalf of Tata Steel Limited, that concludes this conference. Thank you all for joining. You may now disconnect your lines.