MUGHAL_1QFY22 EPS clocked in at PkR5.03 - Above expectations, (AKD, Off the Analyst's Desk, Oct 29, 2021)
AKD, Off the Analyst's Desk
MUGHAL: 1QFY22 EPS clocked in at PkR5.03 – Above expectations
- Mughal Iron & Steel Industries Limited (MUGHAL) announced result for 1QFY22 where company posted impressive NPAT of PkR1.7bn (EPS: PkR5.03) vs NPAT of PkR352mn (EPS: PkR1.05), increasing by 380%YoY and 84%QoQ.
- The topline registered a growth of 81%YoY to PkR14.0bn mainly due to increase in gross margin to 19.6% against 12.5% witnessed in 4QFY21 owing to increase of 15.4%QoQ in local rebar prices and a decline of 3%QoQ on avg. scrap prices.
- Ferrous segment posted net sales of PkR10.3bn (+52%YoY) with a gross margin of 14% vs 6% in 1QFY21. Non-ferrous segment posted net sales of PkR3.75bn with a gross margin of 35% vs 47% in 1QFY21. Moreover, other income increased by 223%YoY while finance cost remained flat QoQ.
- We await clarity from management regarding the deviation from our result before updating our earnings estimates for MUGHAL. The company currently trades at FY22F P/E of 6.40x while 3-yr PEG stands at 0.34x with our TP of PkR135/sh provides a capital upside of 52% from last close – Buy.
AKD Research
Mughal Iron & Steel Industries Ltd. Mughal Iron & Steel Industries Limited is engaged in manufacturing and trading of mild steel products. The Company is engaged in producing steel in the long-rolled steel products, which has a capacity of 688,000 metric/tons of re-rolled steel per annum. The Company is engaged in multidimensional activities from making billets of mild steel, spring steel, deformed bar, re-bar, cold twisted rebar and a range of sections, such as I-beams, L-sections, C-section, H-beams and T-bar. The Company offers its products under various categories, including Smelting, such as Ferro Silicomanganese, Ferro Chrome and Ferro Silicon; Billet, such as Mild Carbon Billets, Spring Steels, Austentic Stainless Steel, Ferrite Stainless steels and Alloys Steels; Bars, including Deformed Bars, Re-inforcement Bars and Thermax Bars; Beams, including I Beams (Girders), Angle Section (L Section), T Bar (T section) and C Channel, and Grade and Specifications, including ASTM A 615 G-40 and ASTM A 321.
AKD Securities Ltd. is one of the leading securities firm in Pakistan, providing a comprehensive range of investor focused services, including equity brokerage, economic and securities research, investment banking and financial advisory services. AKD Securities accounts for more than 6% of the average daily value of the Karachi Stock Exchange. AKD Securities was the first brokerage house to launch an online trading platform in Pakistan in November 2002 and now has the largest market share with over 6000 customers. This has helped diversify and expand the retail investor base in the country and ushered in a whole new universe of investors to the stock market.
AKD Securities Ltd. caters to a diversified group of domestic and international institutional investors, high net worth individuals and upscale retail clients, including expatriate Pakistanis. With high quality research, unparalleled execution and distribution capability for both regular and large block trades, AKD Securities Ltd. has earned an outstanding reputation in the Pakistani securities industry.Outside of commercial banks, AKD Securities Ltd. is one of the biggest capital market firms in the country. AKD Securities is the leader in raising and providing risk capital in underwriting, market making and mergers and acquisitions in Pakistan. Good corporate governance and professionalism are emphasized throughout the firm and AKD Securities Ltd. is amongst the very few companies to have introduced a firm-wide comprehensive CODE of ETHICS, overseen by an independent compliance manager.Ultimately, our success is based on the quality of service we provide to our customers and the trust and confidence reposed in us by them. Our focus, therefore, remains on customer satisfaction at all levels in the company.
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