MUGHAL_Attractive entry point ,(AKD Daily, Apr 13, 2023)
AKD Daily
MUGHAL: Attractive entry point,
- Most of the manufacturing sector witnessed significant slowdowns in the first half of FY23 majorly on the back of 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 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 (aluminum) and add other base metals (zinc) in it, we expect the contribution from 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 last close, based on a WACC of at 26% (RF/Rm: 21%/9%) and terminal year of FY28 (terminal growth of 4%)
AKD Research
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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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