PACRA maintains the Entity Ratings of Mughal Iron & Steel Industries Limited
Mughal is a known name in the steel industry. The Company’s business profile has sustained and improving, over the last few years. Governance framework is strengthened by presence of independent oversight on board. The Company has a diversified product slate as its operating both in ferrous & non-ferrous segments. The ferrous segment comprises Billets, Rebars & Girders while the non-ferrous segment comprises Copper ingots mainly. Furthermore, the establishment of strong brands like ‘Mughal Supreme’ gives a competitive edge to the Company. The ratings incorporate the essence of material advancement that Mughal has achieved in terms of further diversity in revenue streams. The highlighted achievement through geographical diversification in the revenue stream led to a significant contribution from exports of Copper Ingots to China (i-e; ~21% of revenue contribution) which not only contributed to the top line but also brought sustained profit stream, going forward. Mughal has attained a formidable market share by establishing the brand and earning trust with regard to quality. The company is currently working on automation of its non-ferrous plant which is expected to come online by end of current year and also plans to commence exports of Aluminium ingots. With regard to expansion of ferrous segment, the company enhanced its melting and grid load capacity and also carried out BMR of re-rolling mill. The reported profitability for Jun-22 showed significant growth from previous years primarily due to increase in sales prices as volumes in ferrous segment declined slightly. Margins witnessed slight decline as the impact of increase in raw material prices and other input costs was not completely transferred into sale prices.
The ratings are dependent upon the company’s ability to sustain its healthy business profile amidst strong competition, herein, effective and prudent management of financial risk indicators remain important. Moreover, upholding of governance framework is vital.
Mughal Iron & Steel Industries Limited (Mughal), is a public limited company incorporated in 2010, is primarily engaged in the manufacturing and sale of billets, girders, and rebars. The Company has expanded its product base, by entering in non-ferrous segment. Mughal operates with a melting capacity of 500,000M.T, rerolling capacity of 430,000M.T., a further capacity enhancement plan is underway to increase the rerolling capacity to 690,000M.T. and non-ferrous melting capacity of 10,000M.T. Currently, a nine-member BoD is monitoring the overall functioning under the chairmanship of Mr. Mirza Javed Iqbal. Mr. Khurram Javaid is on the execution lead as CEO and the driving force behind the Company. Other senior tier management is associated with the company for a fairly long period of time. Diversified skill set and experience of multiple years reflected from member's profile, contribute to strong foot printing of the Company in the market.