MUGHAL diversification into copper ingots to unlock earnings potential

Mughal Iron & Steel Industries Limited (MUGHAL) has diversified its business portfolio by venturing into exports of copper ingots that involves extraction from compressed scrap. Moreover, the increase in prices of copper ingots in the international market will further strengthen the earnings potential of the company going forward (CAGR of 67% in FY20-24).

Hence, we revise up our earnings estimates by 75/56/51% to PKR 10.9/12.4/13.8 per share in FY21/22/23 and Dec’21 post right target price to PKR 125/sh (Pre-right TP of PKR 145/sh, upside 31.8%).

Courtesy – BMA Capital Management Ltd

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