LAHORE, Mughal Iron & Steel Industries Limited, a prominent name in the steel industry, has maintained a strong and improving business profile over recent years, as per The Pakistan Credit Rating Agency Limited (PACRA). The company’s governance framework is bolstered by the presence of independent oversight on the board.
According to Pakistan Credit Rating Agency Limited, Mughal Iron & Steel has diversified its product slate, operating in both ferrous and non-ferrous segments. The ferrous segment includes Billets, Rebars, and Girders, while the non-ferrous segment is mainly composed of Copper ingots. A significant achievement for the company has been its geographical diversification in revenue streams, with around 24% of its revenue coming from exports of Copper Ingots & granules to China. This not only contributed to the top line but also brought a sustained profit stream.
For the first quarter of FY24, the company’s top line was recorded at PKR 21.032 billion, according to management accounts (FY23: PKR 67.390 billion). This figure was achieved despite a significant decrease in volumes and a slight erosion in gross margins, as the impact of increased raw material prices and other input costs were not entirely passed on to sale prices. The net margins also showed a downward trend due to high finance costs. The company’s leveraging ratio was reported at approximately 51.5% in September 2023.
The company has also relied on privately placed issued instruments to fuel its working capital requirements. PACRA states that the ratings are contingent on the company’s ability to sustain its robust business profile amid stiff competition. Effective and prudent management of financial risk indicators remains crucial, as does upholding a strong governance framework.
Mughal Iron & Steel Industries Limited, incorporated in 2010, is primarily engaged in manufacturing and selling billets, girders, and rebars. The company has expanded its product base by entering the non-ferrous segment and operates with significant melting and rerolling capacities. The company’s board of directors, comprising nine members, is chaired by Mr. Mirza Javed Iqbal, with Mr. Khurram Javaid leading as CEO.
Mughal Iron & Steel issued a Rated, Unsecured, Privately Placed Short-Term Conventional Commercial Paper of PKR 2,000 million to finance its working capital requirements. The instrument, with a tenor of 9 months and a profit rate of 6MK+150bps, is due for a bullet payment of profit and principal at maturity.
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