Analyst Meet Third Quarter –

Contents Operations Financials Outlook Industry Company

Operations – highlights Volume growth of 5.5% in crude steel and 18% in galvanised products Converter life crosses 9500 heats Blast furnace production 72,000 MT in Dec-05 Average Coke price $ 180 / ton vs $ 250 / ton in the previous quarter

Operations – highlights contd./….. Significant reduction in fuel rate consumption as compared to the previous quarter Channel financing facility for dealers

Operations – Production Q3 (In mln. tons)

Operations – Sales Q3 Mn ton (In mln. tons)

Production upto Dec, 05 vs Dec, 04 Volume mt 7% 26% 28% 13%

Sales upto Dec, 05 vs Dec, 04 Volume mt 24% 9% 34%

Operations Financials Outlook Industry Company

Financials – Highlights Q3 Debt equity ratio at 1 Interest cost reduced by 23% to Rs Crore as compared to Q3, 05 Rating assigned by CARE AA(-)

Financials – Highlights Q3 contd./…. Debt repayment of Rs. 227 Crore (Rs. 776 Crore up to 9 months in FY 06) Financial appraisal for 2.8 mtpa expansion completed

Financials – P&L Account Q3 Rs. in Crs.

Financials – P&L Account 9 months Rs. in Crs.

Operations Financials Outlook Industry Company

Industry Outlook Determinants of the Outlook –Price behaviour –Production data –Demand outlook –Average operating cost Examining these ……

Price Behaviour Source - WSD June 2005 report & Metal bulletin ($ / ton)

Global production data Source - IISI

Production Data contd./….. Source - IISI

Demand Outlook (In mln. tons) Source - IISI Demand to grow by +4-5% for world and +7% for Asia Pacific

Average operating cost Source - WSD June 2005 report ($ / ton)

Industry Outlook Robust economic growth particularly in infrastucture, construction & auto Consolidation in industry intensifies Chinese cutting production significantly –Aluminium industry restructuring-an example Chinese local market prices up by US $25 (source : Tex Report) Considering all factors – a stable price regime is expected Demand continues to be strong

Operations Financials Outlook Industry Company

Cost Leadership journey Ongoing projects New projects Outlook - Company

Cost leadership journey Optimisation of coal blend to reduce cost & get lowest consumption rate Recycling of waste upto 85 % Special measures to increase Convertor lining life – heats Beneficiation of low grade Iron ores

On going projects Expansion of Steel capacity from 2.5 to 3.8 Mln. tn. Expansion of Pellet plant capacity from 4.2 to 5 Mln. tn. Expansion of Hot Rolling Mill from 2 to 2.5 Mln. tn.

ESP Screening Sinter Plant

Sinter cooler Sinter Plant

Blast Furnace

Coke Oven 2

Capacity post expansion

On going projects to be commissioned in phases by 1 st quarter Impact for 9-10 months during FY

New projects 1.0 mtpa CRM project - March ‘07 Capacity expansion to 7 mtpa - March ‘09 Cost of the projects - Rs Crs.

Product Mix Enhancement – CR complex HR Slit0.10 HR Pickled & Oiled0.10 CR Annealed & skin passed0.60 CR Full Hard0.20 Value added product profile would improve to 53%

Financing plan Sources of funds Rs. in crore Equity / Internal accruals: 2550 Debt: 3600 Total: 6150

Key ratios All figures annualised wherever necessary

Rights Issue

Rights-Broad Terms Fund raising upto Rs. 400 crs. (without warrants) Entitlement ratio on equity shares 1:8 Warrants entitlement of one Series A & one Series B warrant for every equity share offered on rights basis Warrant conversion period –Series A : months from allotment date –Series B : months from allotment date

The terms of warrants issue shall be decided by the committee of the Board Warrants to be listed on allotment and will be tradable Rights-Broad Terms

Thank You