January 26, 2026 (MLN): Mughal Iron & Steel Industries Limited (PSX: MUGHAL) has retained its long-term and short-term entity ratings at ‘A+’ and ‘A1’, respectively, which reflects the company’s strong liquidity position and sound credit quality.

The outlook on the ratings remains stable, indicating expectations of continued resilience despite potential economic fluctuations.

The rating action was reaffirmed by VIS Credit Rating Company Limited, which cited MUGHAL’s adequate protection factors, strong likelihood of timely repayment of short-term obligations, and consistent operating performance.

The previous rating review was conducted in November 2024.

Incorporated in Pakistan in 2010, MUGHAL operates across both ferrous and non-ferrous segments, with a primary focus on the manufacturing and sale of mild steel products.

The company’s manufacturing and warehousing facilities are located on Sheikhupura Road, Lahore, while its sales operations are based in Badami Bagh.

MUGHAL’s sole investment subsidiary, Mughal Energy Limited, is nearing completion of a 36.50 MW hybrid captive power plant aimed at supplying electricity to the company’s operations.

The ratings reflect MUGHAL’s established position in Pakistan’s steel sector, supported by a diversified product portfolio, integrated operations, and long-standing relationships in both domestic and export markets.

Ongoing investments in captive and sustainable energy initiatives are expected to lower power costs and support margins over the medium term.

However, the company remains exposed to business risks stemming from demand cyclicality, competitive pressures, and volatility in raw material prices.

VIS noted that MUGHAL’s market position, improving coverage indicators, adequate liquidity, and strengthening capital structure provide support to the current ratings.

Key sensitivities include the company’s ability to sustain margin improvement, efficiently manage working capital, and maintain liquidity and coverage metrics at current levels. 

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