Mughal Iron & Steel Projects Growth Despite Earnings Decline

Karachi: Mughal Iron & Steel Industries Limited (MUGHAL) held a corporate briefing to discuss the financial results for the fiscal year 2024 and future projections. The company reported a 43% year-over-year decline in earnings amounting to Rs2 billion, with an earnings per share (EPS) of Rs5.96.

According to JS Global, despite the drop in earnings, MUGHAL’s topline increased by 37% to Rs92 billion, primarily due to higher sales volume. Nonetheless, the gross margin decreased by 6 percentage points to 8.35%, attributed to lower retention prices. Ferrous volumes for the year reached approximately 310,000 tons, distributed among rebar, billets, and girders at 53%, 27%, and 20%, respectively. Copper exports were around 8,700 tons, with a potential growth forecast of 15-20% for FY25, contingent on the availability of quality raw materials.

The company plans to expand its ferrous volumes through a BMR activity at its existing rolling mill, aiming to manufacture both steel rebars and medium sections with a monthly capacity of 8,000 to 10,000 tons. This expansion is expected to lower fixed costs by increasing production volumes. The coal power plant will serve as the primary energy source, projected to operate for approximately 7,000 hours annually, with additional energy sourced from the grid. The energy tariff is anticipated to range between Rs20-22 per unit, while the capacity component is expected to be Rs4-5 per unit. Mughal Energy Limited will continue to benefit from an income tax exemption.

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