Mughal Iron & Steel Industries Ltd. (MUGHAL) reported a consolidated NPAT of PKR420mn (EPS: PKR1.14) for 3QFY26, marking an 85% YoY increase, though down 22% QoQ. This was slightly below the expected EPS of PKR1.23, due to a 0.5 ppt contraction in gross margins.
Key points from 3QFY26:
– Net sales totaled PKR18.4bn, a 15% QoQ decline, attributed to weaker volume sales during Ramadan and Eid.
– Gross margins fell to 8.8%, lower than the estimated 9.2%, due to reduced fixed cost absorption from lower sales.
– Sales and marketing expenses dropped 44% QoQ to PKR25mn.
– Finance costs decreased to PKR819mn, down 12% QoQ, due to lower short-term borrowings.
– The effective tax rate was 21%, contrasting with a tax reversal last year.
The company anticipates margin expansion with the upcoming 36.5MW captive power plant. However, rising interest rates and reduced PSDP spending could negatively affect their earnings outlook in the short term.
Courtesy – IMS Research
