Mughal Iron & Steel Industries Limited has retained its long-term and short-term entity ratings at A+ and A1, respectively, with the outlook remaining stable, reflecting the company’s solid liquidity profile and sound credit fundamentals.

The rating affirmation was announced by VIS Credit Rating Company Limited, which highlighted MUGHAL’s adequate protection factors, strong capacity for timely repayment of short-term obligations, and consistent operating performance. The previous rating review was conducted in November 2024.

Incorporated in 2010, Mughal Iron & Steel operates across both ferrous and non-ferrous segments, with its core business centered on the manufacturing and sale of mild steel products. The company’s production and warehousing facilities are located on Sheikhupura Road, Lahore, while sales operations are based in Badami Bagh.

The ratings also factor in the company’s established position within Pakistan’s steel sector, supported by integrated operations, a diversified product range, and long-standing relationships across domestic and export markets.

MUGHAL’s wholly owned subsidiary, Mughal Energy Limited, is nearing completion of a 36.50 MW hybrid captive power plant, which is expected to supply electricity to the group’s operations. Ongoing investments in captive and sustainable energy solutions are anticipated to help reduce power costs and support margins over the medium term.

However, VIS noted that the company remains exposed to industry-specific risks, including demand cyclicality, competitive pressures, and volatility in raw material prices. Despite these challenges, MUGHAL’s improving coverage indicators, adequate liquidity, and strengthening capital structure continue to provide support to the assigned ratings.

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