Mughal Steels Reports Rs 440M Profit 4QFY25
MUGHAL announced its 4QFY25 result today, where the company recorded consolidated profit of Rs440mn (EPS of Rs1.31), down by 28% YoY, while up 94% QoQ.
The result came higher than expected due to higher-than-expected gross margins.
The company recorded gross margins of 9.75% in 4QFY25 compared to 6.48% in 3QFY25 and 9.21% in 4QFY24.
Gross margins improved on a QoQ and YoY basis due to economies of scale and falling grid prices, along with economic recovery.
To recall, Steel Scrap prices clocked in at an average of US$347/ton in 4QFY25 compared to US$383/ton in 4QFY24 and US$257/ton in 3QFY25, down by 9% YoY and 3% QoQ.
Net Sales of the company decreased by 10% YoY to clock in at Rs22.8bn in 4QFY25. While on QoQ basis, it is up by 18% QoQ due to seasonality impact coupled with higher sales in the ferrous segment, in our view.
Finance costs in 4QFY25 decreased by 37% YoY and 11% QoQ to Rs1.06bn, mainly due to lower interest rates.Steel sector to post record profitability
MUGHAL recorded taxation and levies of Rs306mn in 4QFY25 compared to tax reversal of Rs1.02bn in 4QFY24.
In FY25, MUGHAL posted a profit of Rs852mn (EPS of Rs2.54), down by 55% YoY compared to a profit of Rs1.91bn in FY24.
Gross margins in FY25 stood at 9.1% compared to 8.4% in FY24. Gross Margins improved as international CRC and HRC prices fell over the year.
Alongside the result, company did not announce any cash dividend, which was in line with industry expectations.
MUGHAL is currently trading at FY26E/27F PE of 6.0/4.5x.,” Topline Research said.
