Lahore, 17 Oct 2023:The Pakistan Credit Rating Agency Limited (PACRA) has reaffirmed its ratings for Mughal Iron and Steel Industries Limited's PP Sukuk. Mughal, a well-established name in the steel sector, has shown consistent progress in its business profile over the past years. Key features of the company's robust performance include a fortified governance framework with independent oversight and a diversified product range spanning both ferrous and non-ferrous segments. Notably, Mughal's geographical diversification strategy led to a significant 24% revenue contribution from Copper Ingots and granules exports to China, positively impacting its top line and ensuring sustained profitability.

For the fiscal year 2023, Mughal reported a top line of PKR 67.390 billion, reflecting a growth of approximately 2% year-on-year. This growth came despite noticeable decreases in volume and minor setbacks in gross margins. The challenges arose from the company's inability to fully offset the rising costs of raw materials and other inputs by adjusting sale prices. Consequently, net margins have trended downwards, impacted by elevated finance costs. The company's leveraging ratio, as of June 2023, was documented at around 51%. In addition to its banking resources, Mughal has issued several privately placed instruments to support its working capital needs.

PACRA emphasizes that the company's ratings hinge on its capability to preserve a strong business profile amidst intense market competition and broader economic challenges, including inflation. The meticulous management of financial risk markers and the sustenance of its governance framework remain critical for Mughal's continued success. The information was shared through a press release from the Pakistan Credit Rating Agency Limited (PACRA).