AsiaNet-Pakistan Premier Editorial Content and Press Release Distribution Service
Lahore, 17 Oct 2023:The Pakistan Credit Rating Agency Limited (PACRA) has maintained its ratings for Mughal Iron and Steel Industries Limited, a recognized entity in the steel sector. Mughal’s business profile has shown consistent progress over recent years, marked by its strengthened governance and the presence of independent oversight within its board. The company operates in both ferrous and non-ferrous segments, offering a variety of products. A robust inbound logistics and supply chain network, along with investments in alternative energy sources, have provided Mughal with a competitive edge in the market. A key highlight is the company’s achievement in diversifying its revenue streams.
Mughal’s decision to diversify geographically in its revenue generation has led to a notable contribution from exporting Copper Ingots and granules to China, accounting for approximately 24% of its revenue. This strategic move has not only enhanced the company’s top line but promises to sustain its profit streams in the foreseeable future. Mughal has cemented its position in the market by establishing a reputable brand known for quality. Continual expansion and upgrades to its plants have further strengthened its stance, with the latest addition being a non-ferrous automation plant introduced in June 2023.
For FY23, the company reported a top line of PKR 67.390 billion, marking a growth of around 2% year-on-year. This was achieved despite a notable drop in volumes and a minor decline in gross margins. The inability to fully pass on the increased raw material and input costs to sale prices has impacted these margins. A rise in finance costs has also pushed net margins into a downward trajectory. As of June 2023, the company’s leveraging ratio stood at approximately 51%. To support its working capital requirements, Mughal has not only leveraged banking facilities but also issued several privately placed instruments. Information was made available through a press release from the Pakistan Credit Rating Agency Limited (PACRA).
Mughal’s ratings, as emphasized by PACRA, hinge on the company’s capacity to maintain its robust business profile in the face of fierce competition and economic challenges such as inflation. Effective management of financial risks will be paramount, as will the preservation of its governance framework.
The post PACRA Retains Ratings for Mughal Iron and Steel Amidst Diverse Revenue Streams appeared first on Pakistan Business News.