Press Release

VIS Maintains Entity Ratings of Mughal Iron & Steel Industries Limited

Karachi, December 8, 2023: VIS Credit Rating Company Limited maintains entity ratings of Mughal Iron & Steel Industries Limited (‘MISIL’ or ‘the Company’) at 'A+/A-1' (Single A-Plus/A-One) with a 'Stable' outlook. Medium to long term rating of 'A+' indicates good credit quality; protection factors are adequate. Risk factors may vary with possible changes in the economy. Short term rating of 'A-1' indicates high certainty of timely payment; liquidity factors are excellent and supported by good fundamental protection factors. Risk factors are minor. Previous Rating action was announced on March 31, 2023.
Mughal Iron & Steel Industries Limited was established on February 16, 2010, is a public listed company traded on the Pakistan Stock Exchange Limited. Headquartered in Lahore, MISIL operates in both ferrous and non-ferrous segments, with a primary focus on manufacturing and selling mild steel products. The Company's facilities include manufacturing plants and warehouses on Sheikhupura Road, Lahore, and sales centers in Badami Bagh, Lahore.
Assigned ratings incorporate the high business risk profile attributed to the long steel industry in Pakistan. This risk is underscored by the sector's exposure to economic cyclicality, foreign exchange rate fluctuations, volatility in international steel prices, and a challenging competitive environment. FY23 witnessed a constrained economic landscape marked by floods, inflation, currency depreciation, and dwindling foreign reserves, leading to a contraction in the GDP and reduced market size in the sector.
Assigned ratings also consider the profitability risk profile of MISIL, acknowledging the decline in topline, gross margins, and profitability in FY23. The capitalization and liquidity profile remain adequate with assigned ratings. However, the coverage profile reported a deterioration in FY23 on account of a significant increase in the country’s policy rates during the period under review.
Going forward, ratings will remain sensitive to the Company’s ability to improve its profitability, and coverage metrics. While continued support from non-ferrous segment as well as maintenance of capitalization and liquidity metrics commensurate with assigned ratings will also be important considerations.
For further information on this ratings announcement, please contact Mr. Saeb Muhammad Jafri (Ext: 202) or the undersigned (Ext: 207) at 021-35311861-64 or email at info@vis.com.pk.





Sara Ahmed
Director





Applicable Rating Criteria:
Industrial Corporates (May 2023)
https://docs.vis.com.pk/docs/CorporateMethodology.pdf
VIS Issue/Issuer Rating Scale
https://docs.vis.com.pk/docs/VISRatingScales.pdf

Information herein was obtained from sources believed to be accurate and reliable; however, VIS Credit Rating Company Limited (VIS) does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information.VIS , the analysts involved in the rating process and members of its rating committee do not have any conflict of interest relating to the rating(s)/ranking(s) mentioned in this report.VIS is paid a fee for most rating assignments. This rating/ranking is an opinion and is not a recommendation to buy or sell any securities. Copyright 2023 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .