Ladies and gentlemen, good day and welcome to the Tata Steel Analyst Call. Please note that this meeting is being recorded. I would now like to hand over the conference to Miss Samita Shah to please take it forward. Over to you, ma'am. Thank you, Kinshuk. Good morning, good afternoon to all our viewers. On behalf of Tata Steel, I'm delighted to welcome you to this call to discuss our results for Q1 FY 2024. We have with us our CEO and Managing Director, Mr. T.V. Narendran, and our ED and CFO, Mr. Koushik Chatterjee. They will share their thoughts on the results and answer any questions you may have. Our presentation is uploaded on our website, I hope you had a chance to go through it. As always, the safe harbor clause on page two of that presentation will guide the entire discussion today. With that, thank you, over to you, Naren. You're on mute. Sorry about that. Thanks, Samita. Good afternoon and good morning to everyone. I'll start with a few comments and then hand over to Koushik. You know, the economic slowdown in key regions has obviously weighed on global commodity prices and steel in general. The U.S. and EU continue to face inflationary pressures and a tight monetary policy, while the Chinese recovery has been more muted than expected. One of the outcomes of this is higher steel exports from China, which has led to a moderation of global steel prices between May and June 2023. In fact, China was exporting about 8 million tons a month, which it had last done in 2016. While key steelmaking inputs, coking coal and iron ore prices, did move lower, the steel spot spreads peaked in May before moderating for the rest of the quarter. In India, the economic activity continued to improve, the apparent steel consumption was up 10% year-on-year for the quarter. Despite good domestic demand, steel spot prices declined in line with international prices and sentiments with the market. Hot-rolled coil prices dropped by about INR 4,000 during the quarter per ton in India. Moving to our performance, our crude steel production in India was around 5 million tons. Production was up 2% year-on-year, but marginally lower on quarter-on-quarter basis because of planned maintenance shutdowns. India production now stands at about 70% of the overall portfolio and will continue to rise in the coming years. India deliveries grew 18% year-on-year, primarily driven by the rise in domestic deliveries to chosen segments such as automotive and retail. Our well-established brands, like Tata Tiscon and Tata Steelium, had best ever Q1 sales. Net realizations improved by almost INR 1,000 per ton, quarter-on-quarter, despite the market movement, primarily driven by contract sales of the product mix. Moving to Europe, our steel deliveries were around 2 million tons in the Q1. Revenue per ton was up about GBP 33 per ton on a quarter-on-quarter basis. As we had explained in the past, our contract and product mix ensure that our net realizations are different from the benchmark, which is in Northwest Europe, HBI spot, with a Q1 lag. In the previous quarter, the drop in uncertain was 50% lower than the decline in the benchmark, and consequently, an improvement in this quarter was also correspondingly lower. Overall, the higher revenue per ton was offset by elevated input costs, including energy and the ongoing relining of one of the two blast furnaces in Netherlands, and that we had guided last quarter as well, that the blast furnace, one of the blast furnaces, is down for relining, and that will obviously impact Q1 and Q2 for us. In terms of growth, multiple projects are underway across India, and we remain focused on leveraging the expected pan-India growth across steel end-use segments. For instance, we have a leading market share in auto, and the 5 million tons expansion in Kalinganagar will aid in consolidating our leadership position in auto and grow our presence in value-added segments such as oil and gas, solar, et cetera. Similarly, Neelachal and the upcoming Electric Arc Furnace in Punjab will drive our retail presence. In terms of reach, we have more than 200 distributors now, with over 20,000 dealers. We continue to expand our virtual presence in the e-commerce platforms like Aashiyana, where our sales in the last 12 months has crossed INR 1,600 crores. We are also looking to grow in downstream portfolio across wires, tubes, Structura, and pipes, and tinplate, where we have a dominant market share. In tubes, we have recently commissioned, along with our partners, two new mills, which will increase the capacity in tubes from 1 million tons to about 1.3 million tons. Our investments are strategically focused on business sustainability and growth. Tata Steel is committed to being net zero by 2045, and multiple initiatives are already underway, calibrated to each operating location. In Netherlands, we are pursuing Roadmap Plus for the last few years to bring about significant reduction in emissions, dust, odor, and noise. We are also engaged in discussions with technology providers and the government as we make choices on the process route and the technology transition to green steel, as we have promised to do over the next few years. Greener steel over the next few years. In India, we've undertaken various trials, including injecting hydrogen in the blast furnace to reduce emissions and have also initiated measures to replace around 379 megawatts of coal-based power with renewable energy. Looking ahead, in India, the domestic demand remains supported by government spending and improving consumption across end-use segments. The drop in international prices and seasonality have dampened prices, and we expect a drop in realizations of about INR 3,100 per ton in Q2 compared to Q1 in India. We will, of course, benefit from the drop in coking coal consumption by about $57 per ton, quarter-on-quarter. In Europe, our net realizations are expected to drop by about GBP 38 per ton. Coking coal consumption is expected to improve by about $46 per ton. The ongoing relining, as I mentioned earlier, of one of the blast furnaces at IJmuiden is taking time and will obviously continue to impact costs in the Q2, as it did in the Q4 Separately, the upgradation of the cold rolling mill, where we had some issues post-upgradation, is now getting resolved, and we should be back to normal production there as well. Thank you, and over to Koushik. Thanks, Naren. Good morning, good afternoon, or good evening to all who have joined in. I will begin with the quarterly performance, provided on slide 23. Our consolidated revenues stood at about INR 59,490 crores, with improvement in realizations across geographies, despite the uncertain operating environment and moderation in global steel prices. Our consolidated EBITDA stood at about INR 6,122 crores, which translate to a consolidated margin of 10%. At the India Tata Steel standalone level, the EBITDA stood at INR 7,348 crores, which translates to an EBITDA per ton of INR 15,895. Excluding the Forex impact, the EBITDA was slightly higher at about INR 7,403 crores. As provided on slide 28, there was drop in EBITDA on absolute basis, primarily due to lower volumes compared to the previous quarter, as the Q4 is typically a seasonally stronger quarter. Within cost, material costs were down, but this was partly offset by higher conversion costs on account of royalty-related expenses, which increase normally with a lag. The royalty increased by about INR 353 crores to about INR 1,315 crores due to higher notified IBM prices. Overall, the EBITDA margin was stable at about 23% quarter-on-quarter. Further improved profitability was witnessed in the Neelachal operations, which turned EBITDA positive within 9 months of the acquisition. At Tata Steel Europe, EBITDA loss stood at about GBP 153 million, and on a per ton basis, was broadly similar to the Q4, in line with the guidance that we gave. As shown in slide 13, the steel production was lower quarter-on-quarter, given the relining of one of the blast furnaces in Netherlands, but deliveries were close to 2 million tons as we began to consume the built-up stocks that we had done earlier. Improvements in revenue per ton broadly offset by elevated costs, including energy. As previously explained, we have hedges in place, and the drop in spot natural gas prices will take a quarter to reflect in the P&L. Other income has increased by about INR 1,000 crores, primarily driven by the increase in the standalone accounts. We have signed a lease agreement with Tata BlueScope Steel Limited, which is a 50/50 joint venture with BlueScope Steel, for the line, the coated lines at Meramandali and Khopoli, and this led to the reclassification of these assets, and accordingly, it's reflected in the accounts. Consolidated PAT considers a gain of about INR 338 crores, which is net of tax, on account of this transaction. Let me speak a few words about the taxes, which stood at about INR 1,331 crores. The current tax was about INR 1,027 crores and was broadly in line with the tax on profitability of the India operations. The deferred tax was about INR 303 crores on a net basis, and is a combination of movement of various entities. We have completed the buy-in of the remaining liabilities, and with this, the British Steel Pension Scheme has been successfully de-risked. Similar to previous instances, this has led to a non-cash deferred tax of about INR 1,200 crores. This is being partly offset by other non-tax deferred tax credits at other facilities such as Europe. I would like to mention that there is a residual asset surplus relating to British Steel Pension Scheme in the books of about GBP 200 million. As we get the execution completed with Legal & General, this will also be reflected as a deferred tax charge in the future. The volatility in steel markets has also impacted working capital and cash flows. There's been buildup of around INR 2,500 crores in this quarter. This is more due to the price effect as our working capital number of days remains stable at around 34 days compared to about 37 days in Q4. In the last 12 months, we have released about INR 9,200 crores through the various working capital measurements that we have taken as a management. We continue to commit to growth in India, as Naren mentioned, and spend about INR 4,089 crores on CapEx during the quarter. We have been steadily prioritizing growth in India, and our overall CapEx spend has been about INR 15,500 crores in the last 12 months. This will obviously aid to our consolidation of our market position. At Kalinganagar, the 5 million ton expansion plan will drive volumes as well as positively impact our fixed cost coverage. We continues to prioritize Kalinganagar growth and have spent close to about INR 18,900 crores till date. Apart from that, we have started commissioning the 2.2 million ton cold rolling mill in phases. The full hard cold rolled coil is already being produced. The CAL and the galvanizing lines will be commissioned subsequently. The savings and operational efficiency on account of the 6 million ton pellet plant has started to begin reflecting in our performance. In IJmuiden, the ongoing relining of the BF6 is being financed by internal accruals of TSN operations. The upgradation of the Cold Mill 21 is close to, well, completion. While the relining of BF6 will weigh on performance in the next quarter, there will also be product mix improvement on account of the cold mill upgrade. Neelachal has ramped up as well and is now close to operating capacity at the rated capacity of about 0.9 million tons. The coke plant will be commissioned in this quarter and is expected to drive cost efficiencies in the future. Overall, the working capital and cash flows on account of higher CapEx have led to an increase in the net debt of about INR 3,600 crores on a quarter-on-quarter basis, which is now about INR 71,397 crores. Our finance costs are broadly stable on a quarter-on-quarter basis. The net debt to EBITDA is about 2.9, and net debt to equity is 0.69. The group liquidity remains strong at about INR 30,500 crores, including INR 19,000 crores of cash and cash equivalent. I stated that we are keen to prioritize our growth in India and are recalibrating our deleveraging targets, accordingly, given where the market conditions are. We are now looking to continue to deleverage. That will remain the priority over the next couple of years, but focus on growth continue to take higher and higher priority. The sustainability is at the core of our strategy, which includes providing comprehensive disclosures. We published our first business responsibility and sustainability reporting, which you would have read, covering about 14 entities that make up about 98% of our revenues. We've also published the climate change report, aligned with the recommendations of the TCFD in the integrated report of FY 2023. Finally, moving to the UK, we are in regular and intense conversations with the government, who have also indicated their willingness to secure a decarbonized and competitive future for the UK steel industry. Tata Steel is has clearly articulated that the solutions have to be implemented quickly, has to be financiable, in a effective manner, and will require to transit out of some of the end-of-life assets. This is broadly where we are as far as our performance and the future of Tata Steel is concerned. Thank you, and over to the floor for question and answers. Thank you. We will now begin with the question-and-answer session. We will be taking questions on audio and chat. To join the audio questions queue, please mention your full name and email I.D. in the chat box. Kindly stick to a maximum of 2 questions per participant and rejoin the queue, should you have a follow-up question. We will unmute your mic so that you can ask your question. To ask questions on chat, please type in your question along with your full name and email I.D. in the chat box. We will wait for a moment as the queue assembles. The first question is from Sumangal Nevatia of Kotak Securities. Sumangal, please go ahead. My 1st question is on the Europe division. One is, if you could just share what's our outlook on returning back to some break-even and some positive at the EBITDA level over the next few quarters. Overall, are we seeing light at the end of the tunnel? We've been incurring almost $800 million annualized loss at the EBITDA level over the last 3 quarters. What are our targets and views for next 1-2 years? Do we have any stiff targets as far as some return on capital employed, under which we will decide to take some tough decisions as far as that business division is concerned? Yeah, I mean, overall, just on some near-term guidance on profitability and how we are seeing next two to three years. I will give you some inputs, and then Koushik can supplement. Given you talked of the last three quarters, if you look at the last three quarters, Q3 of last year was when really the highest energy prices and the lowest demand, in some sense it has, as the conflict in UK panned out in some sense of the term. You know, while we did have some hedges to protect us for some quarters, this was where we had a challenge in particularly Tata Steel Netherlands, because Tata Steel UK is separate. If I look at Tata Steel Netherlands, it's always been an EBITDA positive, cash positive business, which has not required support from Tata Steel India. The last two quarters have been different for these reasons. One is we were hit by these input costs going up very significantly, thanks to the conflict. Secondly, as we guided in the last quarter, there's a blast furnace relining, which meant out of the 2 blast furnaces, 1 blast furnace is shut down for 6 months, pretty much. That means Q1 and Q2 of this year. You're seeing the impact of that. While we did stock up on slabs, and that's why the sales drop has not been as much as the production drop. Firstly, those fixed costs which we have for a 7 million ton production, is now distributed over a much lower production, which is reflecting in poor numbers in Netherlands. UK is a bit more reflective of softer steel prices, and oftentimes when we have softer steel prices, we do have a challenge in UK. As Koushik said, in UK, there is a conversation going on with the government, to find a long-term solution, which we hope that will come to a conclusion in the next, few months. In Netherlands, also. You know, the blast furnace starting up in the H2 of the year, we're going back to normal production levels in second half, there is a transition plan being made. As far as the performance, operating performance is concerned, Netherlands should come back to normal levels, which is typically cash positive, EBITDA positive. We should come back to those levels in the H2 of the year. UK, yes, has some structural challenges which we're trying to deal. Koushik, you want to supplement on what I said? Yeah. Yeah, thanks, Naren. Just to, since, Sumangal, you asked about, in fact, 2 questions. 1 is on the next few quarters and next couple of years. Let me just try to articulate the 2 parts. I think the next few quarters, the next quarter will, as Naren guided, that there are pressures on prices. In Netherlands, our relining will get completed more around the end of next quarter, the earlier part of the third quarter. From third quarter onwards, I think Netherlands will certainly come back to its normal operating levels. Maybe the H2 of the Q3 onwards, it will certainly come back to its operating level. We expect the Netherlands will continue to be strong in the context of the market that exists there. It has historically, if I look at last decade of numbers, it is always, as Naren mentioned, it's been a PAT positive and a cash positive business, so we expect to do that. We are also taking a lot of efforts in terms of structurally improving that, then that is going to have a cost impact, or cost takeout impact in. It will not happen in this year, it will happen over quarters in the next year onwards. We would because we will have to become ready for the decarbonization in Netherlands, and that's the reason why the cost structure will start getting aligned to the decarbonized position, which will happen in a few years' time. In the UK, we would, certainly see, the, in the next couple of quarters, a similar kind of range of, performance. But, as I mentioned, and as Naren mentioned, that we will enter a decisive position sometime in the H2 of the year. We will have to take calls, and which is under consideration, and we will have to come to a different operating, structure and operating model. But that would not happen before March 2024. The process will take time, and that is what we will be looking at. UK, in the long term, in this, in the next 2 to 3 years, we will certainly look at a different operating model. Depending on the conversations with the government, we will then have to look at a reconfigured hardware in the UK and see where it goes. I am sure that we will have the time and opportunity to talk more of it in details as we go along in the H2 of the year. This is where I would put it. Like you, we are extremely mindful of the EBITDA losses and then the performance losses that are happened in the, in our European portfolio. I can also assure you that we are working towards a structurally more robust operating configuration in both UK and in the Netherlands. Got that. That's very reassuring, thank you for the elaborate answer. My 2nd question, sir, is on the capacity expansion. One is on KPO 2 blast furnace. We are nearing the commissioning, maybe sometime towards the end of the year. Now, since we are not many quarters away, is it possible to give some specific timeline as far as which quarter we can see commercial production to start from KPO 2 blast furnace? Number 1. Number 2, we've put a very impressive and informative slide 11 on in our deck as far as next 20/30 expansion timelines and potential of reaching 40 million tons. The important element here is the iron ore, because by 2030, what I understand, we will be, all our iron ore mines will be put on auction, and we might not be able to retain all of them. What's our strategy on iron ore, given that we are now articulating our 2030 target as far as steel capacity is concerned? You know, as far as Kalinganagar is concerned, the cold rolling mill and pellet plant have already started working. The galvanizing lines and heating lines will get commissioned over the next few quarters. The blast furnace is expected to come on by Feb-March. That's the current timeline. Blast furnaces, as you know, ramp up quite fast. You know, if you have a good ramp up, you should start seeing the volume impact clearly next year, which is the next financial year. The steel melt shop, we've already added, or we should be adding another stream, another caster, so that should add about half a million tons. Straightaway, we will get some benefit of that this year. That should start by October or November, but the full benefit will come once the blast furnace comes in, the complete steel melt shop expansion is done. I think FY 25 is when you will start seeing the volume impact. I think we'll give you more specific guidance closer to that, but you'll start seeing the volume impact. The cost impact is already being felt, because with the pellet plant commission, we have stopped buying pellets. We used to buy a lot of pellets. We've also started shipping pellets to Miramali from Kalinganagar. Our cost impact is already being felt. Cold rolling mill will again help us margin, if not help us in the volume, because you're converting hot rolled into more value-added products. The additional volume will start coming from H2 of the year in terms of the steel melt shop a little bit. That's why if you see the beginning of the year, we had guided a 1.5 million ton increase in volume this year compared to last year, as some of it was coming from Kalinganagar and some of it from Neelachal. You know, as far as our 2030 plans is concerned, I know, all our existing mines, as in the mines which we've had for a long time, will come up for auction in 2030. As per the law, we have a right of first refusal. In any case, we will participate in the auctions, we can always bid for it and bid to win if we want. That is one option. Secondly, we've also started, we participated in an auction. We've got a mine already, the Nandalpara mine. In addition to that, with Neelachal, one of the reasons we bid for Neelachal is it also has about 110 million tons of iron ore. With Bhushan, we got another 100 million tons of iron ore. The Nandalpara mine is about 350 million tons of iron ore. And with the Usha Martin Steel business acquisition, we got about 25 million tons of iron ore. We already have about 500 million tons of iron ore with us, which goes, which is with us for the next 30, 40 years. But obviously that's not sufficient for the kind of volumes at which we will be operating. We will continue to bid for more iron ore mines between now and 2030, and we have the option to bid for the mines, our own mines, which will expire in 2030. The objective is, of course, to make sure that we are secured on iron ore and obviously manage the weighted average cost of our iron ore. There may be some mines where we may have to bid more, there will be some where we get it at a less of a premium, and we manage those costs. Got that. That's very elaborate. Thank you, and all the best to the team. The next question is from Amit Dixit of ICICI Securities. Please go ahead. Amit, we can't hear you. Kinshuk, let's move to the next speaker, please. The next speaker, Satyadeep Jain from Ambit Capital. Satyadeep, please go ahead. Hi. Thank you. I'm audible? Yes. Yes, a couple of questions. 1st, as a follow-up to Sumangal's question, obviously, the blast furnace relining will be complete in another quarter or so, and the energy hedges roll off. Given where the spreads are, given all these tailwinds from rolling off of energy hedges and completion of blast furnace relining, would we possibly look at breakeven EBITDA for the entire European entity by the end of Q3, given where spreads are? Tied to that would be, in the annual report, there was a target of $1 billion for debt reduction and working capital reduction. We've seen working capital increase and debt increase in this quarter, would management maintain that target for the entire FY 2024? That's the 1st question. Yeah. I'll answer on the. It's like this: we certainly expect the Netherlands business to be positive EBITDA in the H2, and the plan for the year is for it to be positive EBITDA for the whole year, right? If you look at the current spreads, they are in the range of EUR 260-270, you know, which is better than normally you look at EUR 225-240. The reason why those spreads in the last year became less relevant is, normally, when you looked at spreads, you didn't look at the electricity prices and gas prices. Spread was looked at only iron ore, coal and steel price, right? Because electricity and gas prices were typically about, you know, EUR 30 or EUR 40 a ton. It wasn't as material as iron ore and coal. Over the last year, that EUR 30-40 went to EUR 120. Now it is settling back, you know, at EUR 90, EUR 80, and EUR 70. As it comes back, you will, at EUR 270, also be very comfortable. The H2 of the year, you will see the lower energy prices, you know, coming back to still higher than long-term average, but coming back to more normal levels. We will see the production back to normal levels, which will make sure that our costs are back to normal levels. That's why Netherlands is very clearly back on track in the second half of the year. I think UK is where obviously we have a challenge. We are still looking at the numbers for H2. You know, at this point in time, I think we'll wait for the Q2 call to really give you a guidance for H2 on particularly UK. Koushik, you want to add to that or, and also comment on the data option? Yeah. Just to add on it, Satyadeep, a couple of points. One is, just to build on what Naren explained. For the full year, certainly Netherlands will be in positive EBITDA, and that's what we are going to be working on. It'll start certainly from the 3rd quarter onwards, and then we'll look at 4th quarter as it comes. Full year, our target is certainly to be that. In the UK, there will be pressures on this in, as it is continuing at this point of time. The, on an underlying basis, on a combined European entity, we will certainly focus towards being breakeven. That is, on a combined basis. On a reported basis, if we move on to taking structural actions in both Netherlands and in the UK, in UK in particular, there would be structural cost takeout that will get reflected in the reported numbers in the second half. I would just say that we will fork out in the second half between the underlying performance, which we will continue to focus on the breakeven, and including moving towards a positive zone. On the reported side, if we have to take structural actions, especially in the UK, et cetera, some of these actions will have cost implications, which will get reflected in the second half results. I think that is how I would put it. I think the. On your question on the debt, I think, sometime back when we had an investor day, we essentially said, and I think I can remember I was criticized for saying that, "Why is your net debt to EBITDA target so high? Because you would be swimming in money." But I think we had taken the right call to say that it will be between 2 and 2.5. I think that's that net debt to EBITDA goal will continue to be there. It is not something that we have a quarter-on-quarter basis, but certainly on a year-on-year basis, we will try to adhere to that 2 to 2.5 levels, including with the higher capital allocation. If there are extraordinary costs that comes in because of events, like, for example, the blast furnace relining in Europe is one in 10 or 15 years. You know, those kind of things do have to be absorbed to ensure sustainability of the business. Such things, if that happen, then it distorts for a while, but doesn't take our eye off the ball as far as deleveraging is concerned, and we'll continue to be in that zone. Maybe when we are allocating peak CapEx, that can get breached for a while, but again, come back because that CapEx is meant for good purpose and increase our EBITDA in due course of time. I think I would stick to that parameter and ensure that our deleveraging is also of same priority as we grow on our CapEx. In India, we are seeing a multitude pipeline of growth, be it in Kalinganagar at this point of time or the EF furnace in Ludhiana, and our pipeline is really strong. Therefore, we are really looking at it, what does, while the deleveraging and keeping the balance sheet in the investment grade is a big priority for us, I think we will try to balance between that as well as keeping the growth engine on in a substantial manner. I think, what you need to track, which is the 2.5 net debt to EBITDA, which is this quarter, 2.9. By the end of the year, we will certainly want to bring it back to that 2.5 level. Thank you. 2nd question on the European decarbonization. In the presentation, it is mentioned the blast furnace 1 will be transitioned by FY30. Can you remind us when is the relining due for blast furnace 1, the other one in Netherlands? By how long would it take for that to complete it and the CapEx for that transition? Tied to that would be an entire Carbon Border Adjustment tax, that there is talk in India of a voluntary carbon pricing. If companies were to take that lower price and use that to ship products to Europe, how would European steel companies generate ROC on the decarbonization CapEx if some of the Indian companies also use that lower voluntary carbon price to ship steel to Europe on the sea bed? You know, firstly, in Netherlands, basically 1 blast furnace, which is called the BF6, is being relined. The bigger blast furnace, BF7, which produces 3.5 million tons, is up for relining maybe in 2026 or 2027. The plan is, what we've already said when we do the BF6 relining, is this is the last relining that we are doing. We want to transition away from blast furnaces into DRI-based production with an electric arc furnace to support it, and later maybe a reduction, reducing electric furnace. Those discussions are going on internally on phasing the right technology based on the technology maturity and to suit the product mix and other conditions. That work is pretty advanced and a lot of work has been done already. Already, the engineering work has been done on some of these options. We are having very detailed conversations with the Netherlands government and they are also. In Netherlands, the advantage we have is a lot of this transition can be supported by the cash flows that we generate out of Netherlands. We are looking at how can we find that optimal balance of, between, you know, the cash flows that we generate, the support that we get from the government, and any project financing that we may take for that project. That work is going on, but largely it is something that we expect to be self-sufficient and taking care of itself. As far as what you asked, basically, the Carbon Border Adjustment Mechanism is linked to the tax, carbon tax that we pay in Europe based on the carbon footprint that we have. If you look at it from that perspective, already, our Dutch plant is one of the most carbon efficient plants in the world. It has a carbon emission of 1.8 tons per ton of steel, compared to Tata Steel in Jamshedpur, which is at 2.11, and the best in India, right? If you were to apply the carbon tax, anybody shipping from India with a higher carbon footprint will be at a disadvantage. I don't think the European government is going to allow anyone to ship. Material without paying that carbon tax, when the local industry is already paying that carbon tax, because then you're penalizing more carbon efficient industries like the one we have in IJmuiden, and importing steel from less carbon efficient process route. I think the way Carbon Border Adjustment Mechanism is framed, is to look at your carbon footprint and pay tax accordingly. Now, if you can make steel in India with a lower carbon footprint and ship it to Europe, that's a different matter. Today, our European facility is one of the most carbon efficient in the world. If you apply the principles of Carbon Border Adjustment Mechanism, we won't be any less competitive than we are today. As we transition into a greener process route, that carbon footprint comes even lower. I think, while in India, of course, the Carbon Border Adjustment Mechanism is being discussed at multiple levels, but from a European standpoint, it's not just us. Most of the steel industry in Europe and the governments in Europe are supporting this transition, and I'm sure that they will ensure that, in Europe, there is no unfair competition, you know, from less carbon efficient sources. If I may just add to Satyadeep, to that point which Naren explained. The CBAM is actually a carbon equalization process. Therefore, if any company in India, for that matter, anywhere else in the world, was to adopt voluntary internal carbon pricing, that has to reflect in the carbon, in the product that goes to Europe. Just by adopting an internal carbon pricing will not change the embedded carbon. You have to actually produce the product which has the equalized carbon or less carbon than what European standards will provide. I think that it's a kind of an illusion if somebody were to think that Like, Tata Steel today applies $40 internal carbon pricing, but as Naren mentioned, our carbon footprint is 2.1. That doesn't make us any way competitive with vis-à-vis carbon, CBAM, if it was to come in force today. We have to reduce it to the average levels of carbon which CBAM will specify in 2026. I think that needs to be cleared in our minds that what really makes sense. All the transitions that are happening in Europe are looking at a sustainable business case and an investment case for this transition, which I would presume would be in the zone of between, say, 8%-12% of ROIC. Thank you. Thank you. The next question is from Pinakin Parekh of JP Morgan. Please go ahead. Pinakin, we are unable to hear you. Sorry, Am I audible now? Yes, we can hear you, Pinakin. Yeah, thank you very much. My 1st question is going back to the debt reduction. Is it fair to say that now the $1 billion absolute net debt reduction, you know, guidelines that we had at the beginning of the year now would not stand, and we should look more at debt to EBITDA, even which would mean that absolute debt could be higher? No, I think, let me correct myself. The net debt to EBITDA is a frame that we are looking at, has been looking at earlier. We said 2-2.5, if you recall, when we had that conversation on the Investor Day, I think a year or two back. That continues to be our frame. The INR 1 billion debt reduction number is also a number that we will continue to pursue. The question is that, which is, you know, like, for example, this quarter, we had about INR 7,200 crores of repayment, which partly we had to refinance. That's why you don't see it in this, because the working capital increase and the CapEx increase have offset that number, and as a result of which, you see a INR 71,000 crores net debt number. Going forward, in the next quarter, we have a INR 4,500 crores, part of which will be repaid. We will continue to do that on a gross basis. The fact is that our allocation of CapEx is also increasing, and there is some volatility which you can see in the coal prices and steel prices, which is reflecting in the working capital. If I were to take out the working capital impact, we would have certainly seen a net debt reduction. Because of the working capital being blocking it in some ways, and because it is not on the gross basis, but on the liability movement, because fundamentally the raw material prices or the coal prices moved sharply down, the creditors' numbers came down. I don't see that we are giving up on the $1 billion target. We may surplus it, surpass it or we may fall short of it, but we will keep working on that $1 billion and also the net debt to EBITDA number. There are two frames in this equation. We will continue to do that. All that I said is that our CapEx allocation are increasing more than what we have done in the past. In the past, we have also put deleveraging ahead of CapEx, by which we have also slowed down our CapEx, like Kalinganagar, which in hindsight has actually not helped us. The ongoing CapEx is not starved of funds. We will continue to push that, close the CapEx, start getting the output of that kind of growth and continue to deleverage. It's not a bi-binary thing, honestly, Pinakin. It's actually, it works on parallel, we have to manage it based on the circumstances of each quarter and each year as it comes across. Sure. Thank you very much, sir. Just to follow up, if we were to take a view of the next 12 months, yes, there is India CapEx, and there is volatile earnings, but, is there a risk to the target $1 billion net debt reduction not being met because of unforeseen spending in Europe, especially UK? I mean, just trying to understand that between the India CapEx, the Europe CapEx, and the debt reduction, we understand the priority is India CapEx, but what between Europe and the debt reduction? Yeah, it is. I think that's a valid point. I think if you look at, let's look at, in 2023 financial year, or 2022-2023. We had a similar $1 billion, but we did not kind of meet it, because we started allocating more and more CapEx to Kalinganagar, and the volatility in working capital did affect. In Europe, for example, Netherlands is sitting on almost a half a billion euros of cash. That is reflected in the net debt number, because you have that cash sitting there. Now, the blast furnace relining, for example, is funded through internal generations and internal cash of Tata Steel Netherlands. That is going to reflect as you spend the money, then that gets reflected in the net debt also. If you are stopping your production because of the blast furnaces, and therefore it will get reflected, but it will come back again and replenish that, because that is actually the core corpus, and we add to that corpus to ensure that decarbonization in Netherlands is done primarily by government support as well as by internal cash flows. That's how we are going to structure that stuff. In the UK, if there are any extraordinary structural costs that, as I said, is incurred, that will take cash out of the system. I think that is important because, once we have done that, we will actually ensure that we get into a level where the cash bleed comes down very significantly, if not to a neutral and positive zone. In the next 12 months, if I look at, till July 2024, there is certainly the objective of ensuring that we repay on the basis of some of our scheduled repayments, which doesn't get refinanced but paid out. That will be one target. Secondly, how do we optimize on the cash that we may have to pay out to do any restructuring as far as Tata Steel UK is concerned? Understood. Thank you very much, sir, for the detailed answer. The next question is from Amit Murarka of Axis Capital. Amit, please go ahead. Yeah, hi, good afternoon. Thanks for the opportunity. The 1st question is on Europe again. The energy hedges have actually been impacting numbers, as you highlighted. Could you just help understand generally, like, what is the periodicity of these hedges, and what is the quantum of impact that could be coming in relevance to the spot prices, just to better understand the benefits that will come in subsequent quarters? Typically, we hedge, I think 3 quarters ahead, 25% every quarter. That's why, in some sense, Q1 and Q2 would be the peak of what we hedged maybe 3 quarters back, right? From Q2, in fact, in some sense Q1 was a peak. From Q2, you will see if I add the gas prices and electricity prices on a pound per tonne basis, Q1 is the highest, Q2 it'll start dropping, and then Q3, Q4 will drop further. That's pretty much the trajectory. Most of the drop will come in H2. That's why the benefits will accrue more in H2 than, you know, in H1. Koushik, you want to add to that? No, that's perfectly fine. Actually, the hedging happens on a rolling basis on an increased percentage basis. We are also reworked the approach to it, given the volatility, because when the prices are the maximum, the view from the entire analyst community is it will remain like this, and that kind of also helps us to take the hedges, but then the market has moved very differently. One is working on consensus, the other 1 is to also get a sense as to how the market moves and how much is the risk appetite to keep it open. I think we, you will see that the impact of the hedges will wear out, and the energy prices are a lot more range-bound at this point of time, so that would not kind of make too much of an impact going forward. Sure. Is there, is it possible to quantify, like, what could be the hit of those hedges in Q1? Samita? Yeah. We can share the details with you. Just to add, you know, in FY 2022, actually, we benefited from the hedges. If you see how the spot prices had moved, because we had hedges in place, our costs were actually much lower in FY 2023. In FY 2024, we will see some of that impact, we can share the number with you. Sure. My next question is also on Europe. This quarter, like at least from the reported PNL, I see that there's almost a $60-$65 per tonne QOQ improvement in the realization. If I remember right, you had guided for a much lower $15 or so. Is there any one-off in that, or it's actually been much better than you thought? I think the guidance that we gave was it was pretty much, Samita, if I remember right, what we had guided is what we got, right? Yeah. There's not such a big variance in the realizations. I'll just give you the number. Are you talking about Europe specifically? Yeah, Europe realizations. Yeah, Europe. Yeah. We'll come back to you on this. Lastly, if I remember right, both the cost guidance and the net realization guidance for Q1 compared to Q4 was pretty close to what we have guided. Basically, our guidance for Q2 is 38 GBP per ton reduction in realizations in Europe, about INR 3,200 per ton reduction in realizations in India. To some extent, supplemented by coking coal consumption prices reducing by about $50 per ton in both Europe and in India. In Q1 compared to Q4, the guidance on the coal consumption was also close to what we guided. Samita. Yeah. Let's take it. Yeah. Yeah. Yeah, just to add to that, Amit, while the NRAs and the coal guidance we've discussed, I think there were some additional costs because of, you know, the cold-roll mill taking a little more time to stabilize, and of course, the blast furnace being down. Some of these costs have actually impacted the profitability, which is what, you know, which is what you're seeing. The next question is from Indrajit Agarwal of CLSA. Indrajit, please go ahead. Indrajit, we are unable to hear you. We request you to please send in your question via chat. Hi, can you hear me now? Yeah, Indrajit, we can hear you. Hi. I have 2 questions. 1st, can you explain better the BlueScope deal? What exactly have you done here, and what kind of advantages can we see? On BlueScope, actually, BlueScope, Tata BlueScope is a 50%, 50/50 JV, which has been in force since 2005, 6. It is a very significant player in the coated products market, especially the building systems and construction. As per the JV agreement, all the coated products in the building system space is being done or should be done by the JV. Now, when we acquired Tata BlueScope, sorry, Bhushan Steel, we actually had similar product lines in Bhushan, which would have essentially violated the JV, also, as also to have parallel products in the market. To ensure that we are consistent with our approach on, as far as the JV principles are concerned, we actually agreed with BlueScope that we will ensure that we have a long-term lease of these facilities and assets into the BlueScope JV, and that JV will effectively continue to face the market, make the products. The substrate comes from Tata Steel, and it continues to ensure that system-wise, we are, A, compliant with the JV agreement, and, B, more importantly, the market continues to be fed in a more aggressive manner on the coated products, which is a very value-added segment, and it is also growing very significantly. That is fundamentally the arrangement. The accounting implications of that, which is essentially then you de-recognize the assets in your books and convert it into a lease assets, and we'll continue to get the lease charge as well as margin on those assets, going forward, will be the earnings for Tata Steel. That's fundamentally the arrangement. Effectively, when we look at the release, then it moves from EBITDA to other income. Is that the correct way to look at it? That's correct. The turnover goes, the EBITDA goes, and it goes to the other income. The current other income run rate could continue in the foreseeable future, right? Or there's no one-off? No, no, not in this manner. It will be in the form of a lease charges. This is a fair valuation transfer that has happened, which is what has got reflected. What will come in the future is basically the lease charge as well as the margin, capital charge and the margin on the leased assets. That number will be much smaller than what you saw in. Yeah, reported very good numbers. My 2nd question is again going back to Europe, right? There are a lot of news flows floating around. Yeah. Yeah, go ahead. Yeah. There are a lot of news flow floating around what kind of support the U.K. government is extending. Any initial thoughts on what is the current, you know, where are we on the discussions currently? What kind of support are we looking for, and what is it in that is promised, any quantification? Increase in quarter I think what I would suggest is that, Indrajit, let us complete the whole discussion with the government, because there's not just a support from a money point of view, there is also support from policy point of view. There is a lot more other enabling support that we are in discussion with. These are, they have accelerated and picked up speed, and we would hope to come to a frame. As I said that in the second half of the year, we will be in a better position to actually come out and say what is our plan for UK going forward. Meetings kind of. I think there's a bit of a. Yeah, there's somebody speaking behind, so I couldn't kind of. Yeah, you could go on mute. The next question is from Tarang Agrawal of Old Bridge Capital. Tarang, please go ahead. Hi, good afternoon, thank you for your time. I have a couple of questions, one on slide 10 of the presentation, it's mentioned that about 23% of the CapEx was for environmental and social initiatives. Is it 23% of the entire CapEx for FY 2023? If you could just clarify that. The second is, what is the absolute level of working capital as on 30th June? While you've explained it in fair bit of detail as to how you see it, I just wanted to understand, I mean, is there an absolute target that you would perhaps operate with, given the overall, you know, cash flow matrices of the business? This 23% of the CapEx for environmental and social is based on a total portfolio basis. That's what we have disclosed in the past also. That's 23% of all the CapEx spend in FY23? If I look at it, a large part of CapEx in Europe, be it Netherlands, in the UK, in India, have a, what we call as Cat One, Category One, which includes environment, which includes the license to operate, those kind of categories, which are like must CapEx, which is safety CapEx and so on. Those all taken together is this number. It would include investments being made to improve emissions, many other, reduce CO2, whatever. All that would come under that. Okay. Okay. On your 2nd question, I think I'll, what I'll do, I'm just searching for the numbers to give you, but effectively, maybe, Samita, you can give it to Tarang. I think fundamentally what we are saying is the gross working capital, which is, which we manage mostly by number of days holding, whether it's inventory, finished goods, spares, et cetera, slabs, and any work in progress. That bit, in number of days, has been pretty tight. What also happens, which is actually in our, in our world, it is the efficiency matrix. For example, there are special situations. For example, Netherlands was stocking up slabs for the blast ministry line shutdown. There was an increase that happened in the last 3 quarters. This quarter, for example, Tata Steel Netherlands is deeply positive in working capital release because those slabs have got consumed and has got converted to sales. Fundamentally, we look at it in the efficiency matrix in number of days, and that is what is the main part. The second bit of it is the creditors, which is the net of effect on the working capital, which goes up and down based on the large buys on coal and iron ore, especially in Europe. That is a fluctuating bit, which ensures that we continue to manage this bit in the manner in which the creditor line can be as flat as possible. The volatility of price effect does come in. In gross working capital also, the volatility of steel prices gets into the debtors as well as onto the into the finished goods. We manage this matrix, and we have seen this volatility in not only with us, but all our peers, because that is the way with long supply chain, especially on coal and for iron ore also in Europe. These do have fluctuating impacts, but even within that, we then optimize on the number of days. We keep reducing every 1 day, is a big release in the working capital, and that's how we approach. The exact numbers, Samita can give it to you. Just one more last question, then for the annual report. If I look at the standalone financials, the capitalized expenses is in the order of about INR 4,500 crores. Our CapEx in the standalone financials was in the order of about INR 9,800 crores. Is my understanding right that a reasonable part of the CapEx in the standalone financial is gone in for the INR 4,500 crores of pre-operating expenses? No, we don't have pre-operating expenses. What we have, what we do is we capitalize at the end of the year of assets which are commissioned. Therefore, of the total CapEx, it is actually additive rather than being a subset. If you spend, see, some part of it will be work in progress, some part of it will be capitalized. These 2 should add up to the CapEx that we spent for the year. Next question is from Ritesh Shah of Investec. Ritesh, please go ahead. Hello. Yeah. Yeah. Yeah. Thanks for the opportunity. Couple of questions. You indicated residual surplus of GBP 200 billion pertaining to BSPS. How should one understand the cash flow impact over here? Cash flow impact is zero. There is no cash flow impact. This is all... you see, the fund or the BSPS is a separate entity, and this was in our books, and as we did the buy-in with the insurance company, the assets and liabilities both started going away....It had surplus, because that's the surplus that helped us to do the buying. As it went out, the surplus also went out, and when you take out the surplus, then the deferred tax impact, which is a non-cash impact, hit the PNL. There is no cash flow impact in the entire buying that we have done of GBP 8 billion. Sir, the reason I ask is, I think end of March, there was a surplus of around INR 6,600 crores. There's a technical requirement of 103% of the liability, which the insurer would like to have. That's a minimum number. Right. It might leave out certain quantum. Is there a hope that that could come back to the India balance sheet? The question was more pertaining from that angle. No, no. No hopes for that, because it is, as I said, it's a separate entity, which gets consolidated in the TSUK books and hence the Tata Steel books. This is a completely a non-cash transaction. The bit on the surplus is the trigger point with not only the insurance company, but also with the trustees, that when it reaches a surplus, we can do a full de-risking. It's in effect, a lock, stock, barrel transfer in parts, and that's what we have achieved. In the end, there will be some residual which will also have to be taken out, because we are not the owners of the assets. The owners have moved into the insurance company. There's no cash flow impact, positive or negative, that will happen. Sure. Sir, 2nd, you indicated we'll take a decisive action on Tata Steel UK. Sir, why do you use the word decisive in second half? Specifically, you also have elections around the corner, which becomes a bit of a volatile situation. Is there anything that we are looking at it from a numbers standpoint, which made you use the word decisive? The decisiveness is purely because the assets coming to the end of life. Therefore, to ensure that the safety of the employees working and compliance to all the regulatory stuff, we need to come to a view. It has nothing to do with any other extraneous factor, because it is clearly because of the way the assets are at this point of time. When we talk of the asset, let me also clear, it is the heavy end assets which are coming to an end of life, and we need to take actions as a responsible corporate on these assets. This is essentially the reason. Sure. This is helpful. I'll join back the queue for more questions. Thank you so much. Ritesh, just to answer your question, just to add to the question on the BSPS charge, after the GBP 200 odd million, which Koushik mentioned, there would be a, you know, corresponding deferred tax charge of around GBP 50 million. That's what you need to factor in. Sure. That's helpful. Thank you so much. Thank you. I would now like to hand the conference over to Miss Samita Shah for the chat questions. Over to you, ma'am. Thanks. Thanks, Kinshuk. The first question is actually on the consolidated EBITDA, and can you please draw a bridge to INR 6,122 crores? This is, I think, really coming from the, TSLP, and how do we kind of arrive at that number? You can answer that. Essentially, you know, if you when we're looking at EBITDA, we are actually looking at it slightly differently from the way you do. We are really looking at total income and then excluding expenses. Whereas, I think, when you are looking at it, you exclude other income, and that is essentially the difference of what gives us 6,122 crores. We'll move to the next question. What is driving This is on TSLP. What is driving the higher sales realization at TSLP? Is there any one-off in that? Would you like to take that, T.V.? No, there is no TSLP. Yeah. There's no one. It at best could be if the iron ore sales is included. Higher compared to the previous quarter, but actually the quarter-on-quarter is lower. It's not. Yeah. Okay. It's in line, actually. I'm not sure where. There is better profitability. I don't know if you're referring to that. Your question says, sales realization, sales realization is pretty much flat. Yeah, yeah. TSLP is, of course, benefiting a bit from the strong auto market, because TSLP has a lot of products going to auto. quarter on quarter, you know, it's not so... Only thing is, okay, Samita, it's possible that the Neelachal numbers are consolidated into TSLP, and Neelachal sales in Q1 would be higher than before. I don't know if that is adding to it? That, the question. Thank you. Thank you. What is the expected reduction in net sales in NRs in Q2 for India operations? I think you explained it, but let me. Yeah. We said about 3,100 INR per ton, quarter-on-quarter reduction. This is on Netherlands and the decarbonization project. What sort of funding are we expecting from the Netherlands government? I think the conversation is still on, too early to give a specific number, but I think what we've also highlighted to the Netherlands government is the kind of support that the other countries in Europe are providing to our peers in Europe, so whether it is Germany, whether it's Spain. The conversation is going on what would be a fair, a level of funding, not only to support us in the transition, but also to make sure that we have a reasonably level playing field in Europe post the transition. I think that's where we are, when we are closer to conclusion, we can share the details. I must say that we've had very positive conversations with the government. Of course, just now there's a change of government political leadership, but we continue the conversations with the senior bureaucrats in the Dutch government. Koushik, anything you wanna add? No, I think that's fair, the fair summary. I think this will take some time to crystallize, and I think, because we will also have to come back with, our CapEx estimation of that transition. We are just now working, starting to work on the technology partner as well as on the engineering and design work. It is a bit parallel conversation, and that sign-off will happen, it potentially it will take at least about a year or so to get into a final state. There is work to be done, which is what we are doing. The support, as I said, even in Netherlands, it's a combination of policy support, as well as funding support. Thank you. The next question is on the sale to Tata Steel UK. It says: Tata Steel UK has been importing HRC from Tata Steel India. Are these imports being done to support Tata Steel UK operation or to be sold in the local market or both? Also, do these imports fall under the UK steel safeguard quotas? Yeah. The 2nd answer is yes. It falls within the quotas, and we are complying with the quotas. These exports to UK are part of the downstream alignment, and we are not selling directly into the UK market. It is actually given as a substrate to the UK downstream, for example, the tubes. Then Tata Steel UK sells it, converts it and sells it to their customers in place. Thank you. The next question is on steel exports from India and how that is facing issues. It says: What is the impact of China, higher Chinese exports? Indian steel exports have been facing stiff competition from Asian origins such as China and Japan and the Vietnamese and Middle Eastern markets. Is this a cause of concern, and are you looking to explore new export markets? You know, for Tata Steel, exports has always been about 10-15% of our production. Last quarter, I think we exported 5% of our production. We are not so dependent on exports to sell the volumes that we produce. Overall, yes, the Chinese exports for most of the last quarter was at 8 million tons. For 2-3 months, it was at 8 million tons a month and above, which is the highest that it has reached since 2016. 2015-2016, it had gone to about 10 million tons a month, and that is when there was a lot of noise against Chinese exports across the world. Since then, China cut down on exports. It was at about 5 million-6 million tons a month level, which to me is a level which the world can live with. 8 million is certainly a cause of concern, but we believe that it's an outcome of Chinese steel producers producing more in the Jan-March quarter in anticipation of an economic recovery, which didn't happen. We are already seeing a tempering down of those sentiments, you know, and reflecting in the production level. The latest info I have is the last recent month, I think, the exports is likely to be at around 7 million, between 7 and 8, less than 8. We expect that it will, over the next few months, come down to a 5 million-6 million ton level. The Chinese government is also not encouraging exports as they did five, six, seven years back, because today they also have carbon reduction targets. I think the steel industry is being told that they don't want to be really importing iron ore and coal, leave a carbon footprint behind and export a lot of low-value steel. I think there is a discipline which will come in anyways, and we expect the second half of the year to be more balanced. It will reflect more than a direct impact on Tata Steel because of our exports. It is an indirect impact because it will have an impact on the overall steel prices. I expect that if Chinese steel exports come down to 5, 6 million ton level, then hot rolled coil prices should be more in the $600-$650 range, rather than in the $550-$600 range that it is in just now. Thank you. The next question is on CapEx. What are your CapEx plans for FY 2024 and 2025, a split between India and Europe? And on Kalinganagar, what is the remaining CapEx and total project cost? We don't give guidance for FY 2025, but maybe for FY 2024, you could give them some color. 2024, we've already said INR 16,000 crores. I think about INR 11,000 crores out of that was supposed to be for India, if I remember right, Koushik. I think INR 11,000-INR 12,000 crores was India. Largely Kalinganagar CapEx. Obviously, there is no constraint on supporting Kalinganagar CapEx, so as long as they can execute, as fast as they can execute and spend, the money will be given, and we budgeted for whatever is required by the project team. As Koushik mentioned, we've already spent about INR 18,000 crores on the Kalinganagar project, and as they require more funds, it will be made available. The focus is on executing the projects as fast as possible. Thank you. The next question is on NIN. You had mentioned you would be expanding NINL, so can you please shed some light on the timeline and the plans for NINL? Yeah. Our first objective was to make sure that NINL is on full capacity, and all the facilities in NINL which had been, you know, which were set up but had never functioned or hardly functioned, were back on track. I think we've fulfilled that objective within a year, as we had wanted to. The last major facility which will come on track is a coke plant, as Koushik said, which will, which is already the heating is going on and should start production by August. With that, we will be at an optimal production level and at optimal cost level in Neelachal. We've also, the mines, the Neelachal mines, iron ore mines, are also operating and is feeding the requirements of Neelachal. I think the existing network configuration infrastructure is being fully utilized. Now comes the next phase. We've already, we've got the approval from our board to do the detailed engineering in this board meeting, so we will now get into the detailed work. We already have worked out the configuration that we want to have to take it to about 4 or 4.5 million tons, you know, with the first phase of expansion. I think over the next 12 months or so, we will finalize the full detail and go to the board. We've also changed the way we look at some of these approvals. We do the detailed engineering, take it to an FEL 3 level of readiness before we go to the board, so that as soon as we get the board approval, we also get all the environment clearances and everything else that's required. That as soon as we get the board approval, then we can hit the ground running and actually reduce the cash to cash cycle. That's the approach we'll be following here. The work is going on in full speed, and by next year we should be ready to get the approvals and move on. We have said that Kalinganagar will be at 5 million tons yearly by 2030, if not earlier. That's on track. Thank you. Not Kalinganagar, Neelachal will be at 5. Neelachal. Yes, yeah. Thank you. The next question is on iron ore. What would be your iron ore requirements by 2030, and how much of our iron ore capacity is coming up for reauction? Typically, thumb rule is 1.6 tons of iron ore per ton of steel. If you look at our plans for 2030, it's 40 million tons. Let's say 36 million tons out of that is blast furnace based, and if you say 3-4 million tons is EF based, basically you do 1.6 into 36. You roughly have about 70 million or so, right? 60 million or so. That's the requirement, 60-65 million tons of iron ore. As I said, we already have with us reserves of 500 million tons of iron ore, 500-550 million tons of iron ore available beyond 2030. Some of these mines, like the Gandharpara mine, this is, this was not a producing mine, it was a greenfield mine which we are developing. We bid for that so that we could develop it in time for 2030. Just now we will focus on the mines we have, and places like Gandharpara will start making, I mean, start producing iron ore at, in 2030 and thereabouts. Between now and 2030, we want to obviously bid for more iron ore mines in Odisha and in Jharkhand when they put up for auctions. In addition, in 2030, we also have the option to bid for our existing mines. Our objective is to make sure that we are fully covered of our, for our iron ore requirements. By 2030, we will anyway be producing 60-65 million tons of iron ore to support our footprint. Basically, self-sufficiency in iron ore is clearly there till 2030, and beyond 2030, you know, we are expecting that we'll be successful in our bids for our mines. And, you know, and also the mines that we bid for between now and then, and we'll be self-sufficient after 2038. Thank you. The question which we I think get often, has been asked, I will say this. In terms of inorganic growth, are we open to assets such as RINL and NMDC Steel or even Vedanta Steel assets? Is this baked into our deleveraging target? I mean, what we've said is that, you know, our focus on inorganic growth over the last few years has now given us enough sites for us to achieve our growth ambitions by, with pure organic growth. With the existing sites between Kalinganagar, the Bhushan site, Neelachal site, and the existing Jamshedpur site, and the EF facilities that we're going to put up, while we've set a 40 million target by 2030, in these sites you can go up to 50 million tons. In many ways, our growth ambitions for the next decade can very easily be realized by making best use of existing sites, and that will be the most cost optimal way, because you are leveraging or better utilizing the infrastructure that has already exists or being created in these sites. We don't really need to pursue inorganic growth to realize our growth ambitions. That's why we have said that our priority is on organic growth, but at the same time, obviously, we'll be watching carefully what's happening in the inorganic space. Thank you. Just before I go back to the chat questions, there was a question on working capital. As we had explained, there was a working capital increase of around INR two and a half thousand crores this quarter. This is more in terms of prices rather than in terms of days, you know, where they've been broadly stable. The overall consolidated number is about INR 24,000 crores, of which around INR 14,000 crores is in India. You know, just sharing that number so that all of you have it. With this, we will go back to the voice questions. I think there are a few analysts still waiting in line. Over to you, Kinshuk. Thank you. Thank you, ma'am. The next question is from Kirtan Mehta of BOB CAPS. Kirtan, please go ahead. giving this opportunity. Am I audible? Yes, yes. Yes, yes. Yeah, in relation to the iron ore mines, where we have a 500-550 million tons of reserves potential. Yes, yes. What is the current level of production limit under the existing environmental clearances? What are the additional environmental clearances that we have applied, which can enhance this limit at this stage? What is the ultimate level at which this can ramp up by 2030? Basically, Kirtan, the environment clearances are applied for when we need them. We have environment clear, so we typically, you know, plan the expansion of our iron ore mines to be aligned with our increase in steel production. We have enough environment clearances to take care of Kalinganagar, let's say, moving from 3 million to 8 million, right? We've already, last year, we produced over 13 million tons of iron ore. We will move on to about 45 million tons, 50 million tons over the next few years as our steel requirements, steel concern, I mean, steel capacity or production keeps going up. That's not a bottleneck. I think we planned it well so that we have all the environment clearances in place. Like I said, our goal is not to have to buy any iron ore from the market or any pellets from the market. We had to do it over the last 2, 3 years, sometimes simply because of inorganic growth, we grew faster than we had planned. The iron ore expansion was planned to cater to the Kalinganagar expansion. Once you acquired Bhushan and once you acquired, Neelachal, et cetera, we obviously, and the Usha Martin facility, we had to obviously use some of our iron ore for those facilities. There was a bit of a lag, but now we are back on track, and if you're going to do only organic growth, then it's much easier for us to manage the iron ore requirement. Right. Understood. 2nd question was on Europe side, where we have said that over the next 2, 3 years, from the 2, 3-year perspective, the Netherlands would be EBITDA positive as well as cash flow positive. In the past, we have not really shared what is the Netherlands, sort of the individually make. Is it possible to share sort of the average EBITDA that they've made over the cycle over the last 6, 7 years, and the average cash that Netherlands facility has normally generated? Yeah. On that, we normally don't give the, we used to manage and run Tata Steel Europe as one entity. If I can give you a range, the Netherlands EBITDA per ton range has been between EUR 70 per ton to about EUR 140 per ton. In 2021, 2022 context, it was much higher. Typically, Netherlands have been free cash flow positive, about EUR 200 million thereabouts, on an average basis. As I said, that in 2021, 2022, it had generated more than EUR 500 million of free cash. There are, that's why the point that Naren mentioned, that over the years it has normally been a positive PAT and positive free cash flow, not only EBITDA. Our expectation is that post-relining, when the steady state reaches, it would continue with its past performance. There's nothing that needs to be done. What needs to be done is to ensure that it's future-ready in terms of its cost structure towards the decarbonization. That's a special initiative that all our colleagues in Netherlands are working towards. Thank you for this clarification, very useful. I'll go back to the queue. Thank you very much. That was the last question for today. I would now like to hand the conference back to Ms. Samita Shah for closing comments. Over to you, ma'am. Thank you, Kailash. Thank you, everybody, for joining us today. I hope you got the answers you were looking for. With that, we will end here. Thank you and have a good day. Bye-bye. Thank you.