Mughal Iron & Steel (MUGHAL): Big Upside Ahead?

Mughal Iron & Steel (MUGHAL) has caught the attention of investors, and for good reason. A fresh valuation report suggests the stock could almost double in the next year, offering a potential 83% total return (capital gains plus dividends) by June 2026.

How is this number calculated?

Analysts valued MUGHAL using two different methods:

📢 Announcement: We're on WhatsApp – Join Us There! 

• DCF (Discounted Cash Flow): A detailed method that estimates future cash flows of the company and adjusts them for today’s value.
• P/E multiple method: A simpler method that compares MUGHAL’s future earnings with its historical average valuation.

When averaged, these methods give a target price of PKR 127/share vs. today’s price of PKR 71.

Dividend comeback

MUGHAL is also expected to resume dividends in FY26, with a payout of PKR 3.0/share in FY26 and PKR 4.2/share in FY27. This is in addition to any capital gains, making the stock even more attractive.

Why the optimism?

• The company is trading cheaply compared to its history. Right now, MUGHAL is at a forward P/E of 5.9x (FY26) and 4.2x (FY27). For context, its 10-year average is around 9.0x.
• Lower costs, improved efficiency, and better margins from upcoming projects (like the coal power plant) could drive earnings higher.

The bottom line

Analysts are calling it a BUY. If the estimates hold, MUGHAL could reward patient investors with strong price appreciation plus dividend income.

The big question for investors:
Do you see MUGHAL as undervalued today? Or are the risks (like debt levels, steel demand, or energy costs) too big to ignore?

Don't miss:

• Which cars are driving the rally in auto stocks?
• 5 High ROE stocks according to Topline Securities
• Why TPLP could go higher.

Source: Arif Habib Limited

⚠️ This post reflects the author’s personal opinion and is for informational purposes only. It does not constitute financial advice. Investing involves risk and should be done independently. Read full disclaimer →