Mughal Iron & Steels Industries Ltd (MUGHAL) announced its September-2020 Quarterly result where net profit clocked in at PKR 352mn (EPS PKR 1.4 ) in 1QFY21 as compared to PKR 264mn (EPS PKR1.05) in 1QFY20.
Mughal witnessed increased in ts Gross margins during the quarter due to lower scrap prices.
Net profitability of the company increased due to higher volumes after lock down was lifted, improved gross margins and lower finance cost.
| PKR in Million | 1QFY21 | 1QFY20 | Yearly Change |
| Net Sales | 7,734 | 6,678 | 16% |
| Cost of Sales | 6,872 | 5,841 | 18% |
| Gross Profit | 862 | 837 | 3% |
| Administrative expenses | 117 | 91 | 28% |
| S&D expenses | 29 | 26 | 9% |
| Other operating charges | 30 | 23 | 30% |
| Other Income | 31 | 13 | 138% |
| EBIT | 753 | 756 | 0% |
| Financial charges | 312 | 402 | -23% |
| Profit Before Tax | 406 | 306 | 32% |
| Taxation | 53 | 42 | 27% |
| Net Profit | 352 | 264 | 33% |
| EPS | 1.40 | 1.05 | 33% |
Future Ahead
Mughal Iron’s Profitability along with rest of Steel Players will remain under pressure in short-term due to capacity constraints on rebar manufacturing, increased competition due to entry of Agha Steel and Naveena steel and (3) lack of disbursement for public sector projects. This is expected to reduce pricing power of rebar manufacturers.
However the company remain one of the prime Steel Company in Pakistan due to its diversified product portfolio and increased penetration in retail market, (2) construction package announced by the Government, (3) increased public sector spending by the government to uplift economic activity and (4) lower Interest Rates and expecetd recovery in the economy.
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