Mughal Steel's Q1 FY27 net profit falls sharply on lower sales

Pakistan's Mughal Iron & Steel Industries Limited reported a 78.2pct YoY decline in consolidated net profit to PKR 201.4 mln (USD 727,000) for the quarter ended September 30, 2026, compared with PKR 925.7 mln a year earlier.

Net sales fell by 14.6pct to PKR 17.17 bln (USD 62 mln) from PKR 20.11 bln.

Gross profit decreased by 56.7pct to PKR 1.50 bln (USD 5.4 mln), while profit before levies and taxation dropped to PKR 320.5 mln (USD 1.16 mln) from PKR 1.95 bln.

The company attributed the decline in sales mainly to lower export volumes. Within the ferrous segment, overall volumes increased as the group shifted towards greater exposure to the local market. However, the non-ferrous segment remained temporarily suspended as the group adopted a more selective approach in view of prevailing market conditions and associated risks.

In the energy segment, the group's 31.5 MW hybrid power plant achieved commercial operations on August 31, 2026, and started supplying electricity to Mughal Energy Limited. During its first month, the turbine operated at a 68pct plant factor as it was gradually ramped up, resulting in an initial loss. The company expects performance to improve as plant utilization increases.

Looking ahead, Mughal Steel expects a gradual recovery in domestic steel demand and plans to focus on capacity utilization, operational efficiency and product diversification. Modernization of its bar re-rolling mill and the planned introduction of T-section steel are expected to strengthen its market position. The company also expects the hybrid power plant to improve energy reliability and cost efficiency.

With an annual production capacity of around 1 mln tons, Mughal Steel produces billets, rebar and structural steel products, along with copper ingots primarily exported to China.

1 USD / 277 PKR