Lahore: Mughal Iron & Steel Industries Ltd (MUGHAL) released its financial results for the first quarter of fiscal year 2027, revealing a notable decline in profitability. The company reported a net profit after tax (NPAT) of 224 million Pakistani Rupees (PkR), or PkR0.6 per share, marking a 78% decrease from the previous year's NPAT of 997 million PkR, or PkR2.7 per share. This downturn in profitability fell short of analysts' expectations and was predominantly attributed to a substantial reduction in gross margins.

According to AKD Securities Limited, the company's net sales decreased by 15% year-on-year to 17.1 billion PkR, down from 20.1 billion PkR in the same period last year. The decline was largely due to sluggish export offtakes in the non-ferrous segment, although ferrous sales volumes experienced growth during the period, as indicated by the company's transmission.

The gross profit for the quarter dropped 58% year-on-year to 1.4 billion PkR, compared to 3.4 billion PkR in the corresponding period last year. The gross margins contracted significantly to 8.4%, down from 17.2% in the first quarter of the previous fiscal year. The contraction was primarily due to the suspension of non-ferrous offtakes. Additionally, the commencement of Mughal Energy Ltd's 31.5MW hybrid power plant on August 31st contributed to the lower margins, with the plant operating at a 68% capacity factor during its first month.