Tata Steel Is Betting Big On The Quarters Ahead; Managing Director Reveals Why

Yeah, thanks N for having me on the show. Yes, we are an industry which is always impacted by geopolitical events, so we are never short of excitement so to speak. As far as the trade actions are concerned, we are more impacted by what Trump does with Europe and with the UK because that's where we sell most of our steel into the US from. We don't sell any steel from India to the US, so we are not impacted directly by the actions that President Trump has announced yesterday. Of course indirectly we may get impacted because some of our customers may be exporting their products to the US, but I think it's still a bit early to comment because obviously the trade discussions are going on and we'll wait to see what the conclusion is. But yes, we are always planning to maximize sales in the domestic markets in the geographies that we are in so that we are less impacted by what happens across the world.

I think that is the new reality we have to live with. I think EU is already realizing that they had pretty much zero import duty kind of access into the US. That world is behind us at least as far as the US is concerned. I think increasingly across the world, arising out of this as well as the geopolitical risks of having a lot of material moving across borders, we are seeing geographies trying to build self-sufficiency or what we call Atmanirbhar in India, whether it's Europe, what's happening in the US just now, what's happening in China. So there's no reason why India should not continue in this direction as we're doing today. So we need to protect ourselves first. Yes, international markets are there to help us scale up, but everyone is taking care of their interests, so we have to take care of ours as well. So I think this is a new reality we have to deal with and find a way around it.

So as far as pricing is concerned, we believe the Q2 realizations for Tata Steel in India will be about 2,000 rupees lower than the Q1 realizations. Because of the softness that you just described in June and July. But what is interesting is in the last one week the prices in China have gone up about $40 because of the actions that the Chinese government has announced and is expected to take to manage capacities and unprofitable production. So that is what's happening in India. This is typically a lean quarter because of the monsoons and a dip in the construction activity. But the next quarter is expected to be strong. It's a festival quarter. Monsoons will be over and it looks like it's a good monsoon. So we will see the continued pickup in the rural markets. So we are quite bullish about the rest of the year. As far as Europe is concerned, the prices will be more flat. We'll not be showing any drop during this quarter. Maybe a slight increase. So going back to the guidance, prices lower in India, flat in Europe or slightly on the higher side in Europe. Volumes will be much better in Q2, Q3, and Q4 compared to Q1. So volumes will be on a positive, and most importantly the cost takeout plans that we had announced are on track. We had said that 11,500 crores of cost takeouts across the geographies. So we are on track for that. The Q1 plan has been pretty much met and we expect to meet the Q2, Q3, and Q4 plans. So we are basically focusing on what is in our control, which is the volumes and the costs. Prices are not in our control. We will be there to respond to what happens in the market.