The company recorded gross margins of 9.75% in 4QFY25 compared to 6.48% in 3QFY25 and 9.21% in 4QFY24. Gross margins improved on a QoQ and YoY basis due to economies of scale and falling grid prices, along with economic recovery.

§  To recall, Steel Scrap prices clocked in at an average of US$347/ton in 4QFY25 compared to US$383/ton in 4QFY24 and US$257/ton in 3QFY25, down by 9% YoY and 3% QoQ.

§  Net Sales of the company decreased by 10% YoY to clock in at Rs22.8bn in 4QFY25. While on a QoQ basis, it is up by 18% QoQ due to seasonality impact, coupled with higher sales in the ferrous segment, in our view.

§  Finance costs in 4QFY25 decreased by 37% YoY and 11% QoQ to Rs1.06bn, mainly due to lower interest rates

§  MUGHAL recorded taxation and levies of Rs306mn in 4QFY25 compared to tax reversal of Rs1.02bn in 4QFY24.

§  In FY25, MUGHAL posted a profit of Rs852mn (EPS of Rs2.54), down by 55% YoY compared to a profit of Rs1.91bn in FY24.

§  Gross margins in FY25 stood at 9.1% compared to 8.4% in FY24.

§  Alongside the result, the company did not announce any cash dividend, which was in line with industry expectations.

§  MUGHAL is currently trading at FY26E/27F PE of 6.0/4.5x.