· Most of the manufacturing sector witnessed significant slowdowns in the first half of FY23, mainly due to sharp currency depreciation (inducing higher RM prices & exchange losses), supply chain disruptions (import bans/restrictions) and overall inflated commodity prices in the international market.

· Overall, the long-steel industrial volumes are expected to close FY23 around 5.2mn tons (FY22: 6.4mn tons), down 18% YoY, with Mughal expecting to enhance market share to 5.25% (4.9% in FY22).

· The contribution of the non-ferrous sales to the total revenues has grown exponentially in the previous two years, with export revenues accounting for as much as 20% during FY22 (1.5% back in FY20).

· Since the company has indicated that it is targeting to diversify its non-ferrous portfolio (aluminium) and add other base metals (zinc) in it, we expect the contribution from the non-ferrous division to increase significantly in the years to come.

· Overall, MUGHAL remains our top pick in the long steel sector with a Dec-23 target price of PkR73/share on the company, offering an upside of 48% from the last close, based on a WACC of at 26% (RF/Rm: 21%/9%) and terminal year of FY28 (terminal growth of 4%)

Courtesy- AKD Research