Revising Target Price to PKR 96.10, Maintaining Positive Stance
Mughal Iron and Steel Industries Limited (MUGHAL) reported earnings of PKR 314.7m (EPS: PKR 1.25) for 2QFY18, registering growth of 45% YoY. The company’s earnings improved due to higher volumetric sales and an increase in rebar prices, which led to an increase in margins of the company due to consumption of low cost scrap inventory. We have revised our assumptions after incorporating i) the company’s latest financials, ii) the depreciation of PKR against USD, iii) increase in rebar and scrap prices and a recent update on MUGHAL’s expansion plan. Our revised target price for December 2018 is PKR 96.10 (previous target price for Dec-18 was PKR 112), which offers an upside of 30.8% from last day’s closing price; hence, we are maintaining a positive stance on the scrip.
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.
Ismail Iqbal Securities (Private) Limited (IISPL) is a TREC holder of the Pakistan Stock Exchange, as well as an SECP registered Underwriter and Book Runner. IISPL provides comprehensive financial services including Equity Sales, Research on Equities and the Macro-Economy, Investment Advisory, Portfolio Management, Corporate Finance, and extensive services for Private Equity investors. IISPL services a diversified client base, from Institutional to Retail Investors including High Net worth Individuals.
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