Mughal Iron & Steel Industries Limited (PSX: MUGHAL) was incorporated in Pakistan as a public limited company in 2010. The company is engaged in the manufacturing and sale of mild steel products related to ferrous segments. MUGHAL also deals in non-ferrous segments.
Pattern of Shareholding
As of June 30, 2026, MUGHAL has a total of 335.634 million shares outstanding. Directors, CEO, their spouse and minor children have the majority stake of 45.09 percent in the company followed by associated companies, undertakings and related companies holding 22.82 percent shares. Local general public accounts for 12.85 percent of MUGHAL’s shares while Modarabas & Mutual Funds hold 6.63 percent shares. Around 2.89 percent of MUGHAL’s shares are held by Banks, DFIs and NBFIs and 2.79 percent by foreign general public. The remaining shares are held by other categories of shareholders.
Financial Performance (2021-26)
Except for a year-on-year dip in 2025 and 2026, MUGHAL’s topline rode an upward trajectory over the period under consideration. However, its bottomline posted growth only in 2021, 2022 and 2026. The company’s margins which declined until 2020 registered a significant turnaround in 2021 and 2022 only to level down in the subsequent two years. The margins showed decent growth in 2025 and 2026 except for a dip in net margin in 2025. The detailed performance review of the period under consideration is given below.
With 64.70 percent year-on-year boost in its topline, 2021 marked a significant year of revival for MUGHAL. Net sales clocked in at Rs. 44,971.84 million. The staggering growth was the consequence of increase in both prices and sales volumes in ferrous and non-ferrous segments. The government provided incentives to the construction industry during the year. Moreover, monetary easing also provided impetus for a noticeable rise in housing finance. This greatly fueled the demand in the allied industries such as steel and cement. During 2021, MUGHAL’s gross profit improved by 155.64 percent as the company acquired cheap inventory when the prices were low. This resulted in significant inventory gain. GP margin reached up to 14.88 percent in 2021 from 9.59 percent in 2020.
Selling & distribution expense spiked by 76.74 percent in 2021 due to higher freight and advertising expense incurred. The company expanded its workforce to 1971 in 2021 from 1661 employees in 2020 as it commenced it bar re-rolling plant during the year which required additional employees. This resulted in 32.15 percent higher administrative expense incurred during the year. Other expense made a massive jump of 609.55 percent in 2021 on account of profit-related provisioning as well as provision booked for doubtful debts. Operating profit magnified by 169.65 percent in 2021 with OP margin clocking in at 12.42 percent. This was against the OP margin of 7.59 percent recorded in 2020.
Finance cost ticked down by 9.54 percent in 2021 due to reduction in foreign exchange loss during the year. MUGHAL’s net profit spiraled by 478.40 percent in 2021 to clock in at Rs.3429.15 million with EPS of Rs.11.16 and NP margin of 7.63 percent. This was against the EPS of Rs.2.25 and NP margin of 2.17 percent registered in 2020.
MUGHAL’s growth trajectory continued in 2022 with 47.10 percent year-on-year rise in its topline which clocked in at Rs.66,152.81 million. The increase in topline was primarily the result of price revision. The sales volume of ferrous segment inched down in 2022 due to a standstill in the construction activity in the country owing to political turmoil, unprecedented level of discount rate, high inflation, Pak Rupee depreciation and soaring commodity prices on account of Russia-Ukraine war.
Non- ferrous segment registered an increase in sales volume which majorly included exports to PRC. Effective inventory management enabled MUGHAL to overshadow the adverse impact of the aforementioned economic conditions. This resulted in 51.36 percent bigger gross profit recorded by the company in 2022 with GP margin reaching its optimum level of 15.31 percent. Selling and distribution expense was streamlined by 3.42 percent in 2022 which was in line with inflation and increase in logistics cost due to hike in petroleum prices.
Administrative expense increased by 31.1 percent in 2022 mainly on account of rise in salaries due to increase in the number of employees to 2197 coupled with the adjustment of minimum wages. 40.47 percent higher other expense incurred in 2022 was the result of higher profit-related provisioning as well as exchange loss. Other expense was partially offset by 219.31 percent rise in other income which was the result of commission against corporate guarantees, sales tax adjustment as well as claims against materials supplied to the company. Operating profit got 58.55 percent bigger in 2022 with OP margin touching an incomparable level of 13.39 percent. 91.36 percent bigger finance cost incurred in 2022 was the consequence of higher discount rate as well as increased overall borrowings. MUGHAL’s net profit stood at Rs.5410.96 million in 2022, up 57.79 percent year-on-year with EPS of Rs.16.12 and NP margin of 8.18 percent.
In 2023, MUGHAL’s topline posted a paltry 1.9 percent year-on-year growth to clock in at Rs.67,390.17 million. The topline growth was merely price led while overall volumes declined. Political turmoil in the country, devastating floods, import restrictions, global commodity super cycle and drastically declining value of Pak Rupee, high inflation and discount rates etc took a heavy toll on industrial and construction activity in the country. Gross profit dropped by 4.51 percent year-on-year with GP margin sliding down to 14.35 percent in 2023 on the back of high cost of sales. Selling & distribution and administrative expense took a slide of 36.84 percent and 3.24 percent respectively in 2023.
This was on account of lower advertisement budget and curtailed payroll expense respectively. Other expense plummeted by 33.63 percent in 2023 as a result of lower profit related provisioning in line with reduced profitability. Other income grew by 51.87 percent in 2023 on account of higher interest income, gain on disposal of tangible fixed assets as well as higher net foreign exchange gain. Operating profit slipped by 0.6 percent in 2023 with OP margin clocking in at 13.06 percent. Finance cost mounted by 68.69 percent in 2023 on account of higher discount rate. MUGHAL’s net profit eroded by 35.68 percent in 2023 to clock in at Rs.3480.49 million with EPS of Rs.10.37 and NP margin of 5.16 percent.
In 2024, MUGHAL posted year-on-year growth of 37 percent in its topline which clocked in at Rs.92,382.60 million. During the year, both ferrous and non-ferrous sales increased by 47.01 percent and 14.30 percent respectively. This was the result of increase in both prices and volumes during the year. Cost of sales mounted by 46.68 percent in 2024 due to high energy cost and raw material prices. This squeezed gross profit by 20.20 percent in 2024 with GP margin hitting its lowest level of 8.35 percent. Selling expense mounted by 33.62 percent in 2024 due to higher advertisement budget as well as export related expenses incurred during the year. Administrative expense surged by 25.80 percent in 2024 due to higher payroll expense as well as fee & subscription charges related to the issuance of various Sukuk transactions.
The company streamlined its workforce from 2250 employees in 2023 to 2216 employees in 2024. Other expense plunged by 75.95 percent in 2024 due to considerably lower provisioning done for WWF and WPPF. Other income ticked up by 9.64 percent in 2024 due to higher profit on saving accounts, gain on sale of store items, balances written back and finance income recognized on loan granted to a subsidiary company, Mughal Energy Limited. MUGHAL recorded 21.37 percent thinner operating profit in 2024 with OP margin falling down to 7.49 percent. Finance cost mounted by 43.88 percent in 2024 due to higher discount rate and increased short-term borrowings.
This resulted in gearing ratio of 56.96 percent in 2024 versus gearing ratio of 50.61 percent recorded in 2023. During the year, MUGHAL also booked reversal of allowance booked for ECL to the tune of Rs.60.45 million. This was against the allowance for ECL booked in the rest of the year. MUGHAL’s net profit descended by 42.54 percent to clock in at Rs.1999.89 million in 2024. This translated into EPS of Rs.5.96 and NP margin of 2.16 percent in 2024.
In 2025, MUGHAL’s net sales tumbled by 3.21 percent to clock in at Rs.89,413.93 million. This was on account of percent 34.24 year-on-year drop in the sales of non-ferrous segment due to lower sales volume recorded in both local and export markets during 2025. The decline in the sales of non-ferrous segment was in line with the company’s strategic shift towards the ferrous segment. The company also curtailed the business of its non-ferrous segment due to operational and regulatory hurdles. Sales of ferrous segment posted an increase of 6.40 percent in 2025 which was the result of higher dispatches. The change in sales mix and lesser energy cost due to in-house power generation resulted in 5.45 percent increase in gross profit in 2025 with GP margin ticking up to 9.10 percent. Selling & distribution expense mounted by 9.88 percent in 2025 due to higher salaries of sales force as well as increased advertising budget. Administrative expense ticked up by 5.33 percent in 2025 due to inflationary pressure.
This was despite the fact that the company streamlined its workforce from 2216 employees in 2024 to 2080 employees in 2025. Higher profit related provisioning and foreign exchange loss resulted in 75.42 percent greater other expense in 2025. Other income deteriorated by 43.53 percent in 2025 due to lesser profit from saving deposits and TDRs, no foreign exchange gain, no commission against corporate guarantee, no balances written back and no gain on sale of store items. All these factors offset the impact of tremendous finance income of Rs.111.79 million recognized on short-term loan granted to a subsidiary company – Mughal Energy Limited.
MUGHAL’s operating profit inched up by 1.95 percent in 2025 with OP margin slightly increasing to 7.89 percent. Finance cost dropped by 10 percent in 2025 due to lower discount rate and lesser outstanding borrowings which squeezed the gearing ratio to 49.31 percent in 2025. The company was able to cut down its finance cost despite the fact that its dues from government mounted during the year owing to increase in advance taxes related to ferrous operations. The company issued multiple sukuks during the year to meet working capital requirements; however, they were timely repaid. MUGHAL recorded 51.72 percent lower net profit to the tune of Rs.965.518 million in 2025. This translated into EPS of 2.83 and NP margin of 1.08 percent in 2025.
Recent Performance (2026)
In 2026, MUGHAL’s net sales further dropped by 12.81 percent to clock in at Rs.77,958.20 million in 2026. Local sales volume greatly improved during the year owing to growing population, increasing urbanization, enhanced rural housing and increased in public and private infrastructure and construction projects. Conversely, export sales dwindled in 2026 owing to challenging geopolitical conditions. In line with the company’s strategic shift, sales volume of ferrous segment strengthened while non-ferrous volumes weakened in 2026. Another reason for a drop in net sales in 2026 was reduced selling prices. Change in sales mix, operational efficiency and disciplined inventory mix resulted in 6.37 percent uptick in gross profit in 2026 with GP margin jumping up to 11.10 percent.
Distribution expense ticked up by 5 percent in 2026 due to higher salaries of sales force as well as greater advertisement & promotion budget allocated for the year. Administrative expense escalated by 30.16 percent in 2026 due to hefty payroll expense which was the result of market induced spike in salaries as well as workforce expansion to 2247 employees. Increased profit related provisioning was the cause of 81.88 percent higher other expense recorded in 2026. However, it was conveniently offset by 173.52 percent stronger other income recognized during the year which was the result of finance income on long-term loan granted to Mughal Energy Limited, balances written back, gain on sale of store items and foreign exchange gain.
MUGHAL recorded 6.52 percent uptick in its operating profit in 2026 with OP margin picking up to 9.64 percent. Finance cost dwindled by 33.23 percent in 2026 due to lower average borrowings rates. This was despite the fact that the company obtained higher long-term financing during the year for the installation of solar system. This resulted in a gearing ratio of 51.24 percent in 2026. Net profit picked up by a phenomenal 157.62 percent in 2026 to clock in at Rs.2487.37 million. This translated into EPS of Rs.6.75 and NP margin of 3.19 percent in 2026.
Future Outlook
Improvement in macroeconomic indicators will greatly fuel the demand in the construction sector. Besides, cheaper energy purchased from Mughal Energy Limited will reduce the company’s cost of sales and buttress it margins and profitability. This coupled with the company’s focus on product mix optimization, cost control and operational efficiency will benefit its margins and profitability.
The company also seeks to diversify its revenue lines as evident by its participation in a consortium pursuing Gujranwala Electric Power Company Limited (a government-owned DISCO)’s privatization.