Amreli Steels Limited (PSX: ASTL) was incorporated in Pakistan as a private limited company in 1984 and was converted into a public company in 2009. The principal activity of ASTL is the manufacturing and sale of steel bars and billets.
Pattern of Shareholding
As of June 30, 2025, ASTL has a total of 297.011 million shares outstanding which are held by 8695 shareholders. Directors, their spouse and minor children collectively hold around 56.50 percent shares of the company to qualify as the major shareholders of ASTL followed by associated companies, undertakings and related parties holding 18.77 percent shares.
Local general public has a stake of 9.23 percent in ASTL followed by mutual funds with 8.97 percent shares. Around 2.25 percent of the company’s shares are held by foreign general public and 1.77 percent by insurance companies. Banks, DFIs and NBFIs account for 1.23 percent shares of ASTL. The remaining shares are held by other categories of shareholders.
Performance Trail (2019-25)
ASTL’s topline posted year-on-year growth only thrice during the period under consideration i.e. in 2019, 2021 and 2022. Its bottomline dropped until 2020 where it recorded net loss. ASTL’s bottomline recovered from net loss in 2021. However, its bottomline started shrinking since 2022 and ended up making net losses since 2023.
The margins tell the similar tale as the bottomline with the exception of 2023 where ASTL’s gross and operating margins markedly improved. For the first time over the period under consideration, the company posted operating loss in 2024 which sustained in 2025. The detailed performance review of the period under consideration is given below.
In 2019, ASTL’s sales posted a stunning year-on-year growth of 84.48 percent to clock in at Rs.28,595.98 million.
The growth was led by both volume and price. The company sold 277,416 tons of prime bars in 2019 which were 61 percent higher than the sales volume recorded in 2018. However, high cost of sales which mainly came on the back of Pak Rupee depreciation couldn’t be completely passed on to the customers.
This thinned down the gross profit of the company by 12.14 percent in 2019. GP margin also shrank from 17.80 percent in 2018 to 8.48 percent in 2019. Distribution expense jumped up by 85.75 percent year-on-year in 2019 on account of higher advertising and sales promotion coupled with elevated carriage and transport charges as well as salaries and wages.
Administrative expense also grew by 15 percent year-on-year in 2019 due to elevated payroll expense as the company inducted new employees to drive its workforce up from 815 employees in 2018 to 1388 employees in 2019.
Other expense plunged by 85.61 percent in 2019 as ASTL didn’t book any provisioning for WWF and WPPF. Other income dropped by 68.52 percent in 2019 because of high-base effect as there were some liabilities written back in 2018.
High operating expense put further dent on the performance of ASTL and its operating profit slid by 36.11 percent year-on-year in 2019 with OP margin of 4.18 percent versus OP margin of 12 percent recorded in 2018. Finance cost gave another major blow as it grew by 165 percent in 2019 due to a rise in discount rate coupled with increased borrowings during the year.
In 2019, ASTL’s gearing ratio escalated to 56 percent from 49 percent in the previous year. The bottomline slid by 97.93 percent year-on-year in 2019 to clock in at Rs.32.82 million with EPS of Rs.0.11 versus EPS of Rs.5.34 posted in 2018. NP margin clocked in at 0.11 percent in 2019 versus NP margin of 10.23 percent in the previous year.
In 2020, ASTL’s topline took 7.22 percent year-on-year plunge to clock in at Rs. 26,532.14 million. This was because all the businesses including ASTL’s operations were shut down for two months due to COVID-19. In 2020, the company’s sales volume of prime bars shrank by 1.81 percent to clock in at 272,382 tons.
The gross profit of ASTL nosedived by 18.48 percent year-on-year in 2020 with GP margin of 7.45 percent as the company suffered from fuel charge adjustment (FCA) and withdrawal of Industrial Support Package Adjustment (ISPA) which put immense pressure on the cost of sales.
Distribution expense remained in check during the year due to low advertisement and promotion while admin expense posted 9 percent increase on account of higher payroll expense as number of employees further increased to 1398 in 2020.
The company also booked 367.75 percent higher allowance for ECL in 2020. Other expense also gave a cold shoulder and magnified by 433.15 percent in 2020 on account of exorbitant exchange loss due to Pak Rupee depreciation.
Other income grew by 15 percent in 2020 on account of higher profit on TDRs and government grant received during the year. ASTL’s operating profit further narrowed by 56.59 percent year-on-year in 2020 with a skimpy OP margin of 1.96 percent. Finance cost also hit hard as it blew up by 82.15 percent year-on-year in 2020.
This came on the back of increase in discount rate coupled with higher borrowings which pushed up ASTL’s gearing ratio to 67 percent in 2020. Higher finance cost couldn’t be absorbed by the thin operating profit and ultimately produced a negative bottomline of Rs.1126.62 million in 2020. The loss per share stood at Rs. 3.79 in 2020.
The lackluster performance posted by ASTL in 2020 was reversed in 2021 as its topline grew by a remarkable 47.81 percent year-on-year to clock in at Rs.39,218.45 million in 2021. This came on the back of a robust 33 percent increase in off take which stood at 363,949 tons in 2021.
Radical increase in the cost of scrap and cost of electricity which constituted 79 percent of ASTL’s cost wreaked havoc on its cost of sales. However, it was, to a great extent, passed on to the customers which resulted in a striking 129.90 percent year-on-year increase in gross profit with GP margin mounting to 11.6 percent in 2021.
Higher freight charges as well as advertisement and sales promotion charges inflated the distribution cost by 38.64 percent in 2021.
Admin expense also soared by 10.18 percent in 2021 on the back of inflation and human resource induction to support the company’s extended operations. During 2021, the company booked reversals on expected credit losses due to recoveries of due receivables. Higher provisioning for WWF and WPPF pushed other expense up by 31.15 percent during the year.
Other income improved by 195 percent year-on-year on the back of gain on disposal of fixed assets as well as receipt of government grant in 2021. ASTL’s operating profit posted a staggering increase of 480.53 percent in 2021 with OP margin climbing up to 7.7 percent.
Finance cost also lent a helping hand and tapered off by 29.2 percent year-on-year in 2021 due to reduction in the discount rate and also because of lesser borrowings which pushed ASTL’s gearing ratio down to 60 percent in 2021. ASTL recorded net profit of Rs.1368.26 million in 2021 with EPS of Rs.4.61. NP margin clocked in at 3.5 percent in 2021.
In 2022, while ASTL’s off take posted a decline of 0.38 percent; its topline grew by 48.36 percent year-on-year to clock in at Rs.58,184.28 million. This was due to upward price revisions.
While gross profit increased by 42.92 percent year-on-year in 2022, GP margin ticked down to 11.16 percent on the back of huge rise in the cost of electricity and scrap which was further exacerbated by Pak Rupee depreciation.
Inflationary pressure coupled with higher freight, advertisement, bundling and special order charges as well as salaries and wages drove up the operating expense.
Higher profit related provisioning resulted in 50.62 percent taller other expense in 2022. Operating profit grew by 45.58 percent year-on-year in 2022 with a slight downtick in OP margin which clocked in at 7.54 percent in 2022.
Multiple upward revisions in the discount rate coupled with increased working capital facilities availed during the year pushed up the finance cost by 42 percent year-on-year in 2022.
ASTL’s gearing ratio climbed up to 63 percent in 2022. The bottomline nosedived by 3.12 percent in 2022 to clock in at Rs1325.52 million in 2022 with EPS of Rs.4.46 and NP margin of 2.3 percent.
In 2023, ASTL registered topline drop of 21.81 percent year-on-year to clock in at Rs.45,492.72 million. This was on the back of low volume as floods hit the country during the first quarter of FY23 which hampered the construction activity.
Weak aggregate demand due to political and economic instability and shrinking purchasing power of customers also wreaked havoc on the company’s sales volume. ASTL sold 218,279 metric tons of prime rebars in 2023, down 39.63 percent year-on-year.
Record high inflation coupled with low off-take cascaded down into a gross profit slide of 8.15 percent year-on-year in 2023.
However, as the company passed on the impact of cost hike to its customers, its GP margin improved to 13.11 percent in 2023. Reduced advertising expenditures resulted in 16.2 percent lower distribution expense incurred by ASTL in 2023. However, administrative expense inched up by 2.06 percent in 2023 on account of higher depreciation and vehicle fuel cost.
ASTL booked hefty allowance of Rs.119.60 million on expected credit losses, up 2210.26 percent year-on-year in 2023 as slowdown in economic activity lately rendered many businesses incapable of meeting their financial commitments. Other expense dropped by 54.89 percent in 2023 due to low provisioning done for WWF and WPPF.
Other income also slid by 66 percent in 2023 due to reversals against security deposit considered doubtful booked in the previous year.
Operating profit plunged by 8.62 percent year-on-year in 2023 while OP margin inched up to 8.81 percent.
Finance cost grew by a massive 74.83 percent in 2023 due to record high discount rate while ASTL’s net borrowings shrank during the year, as evident in its gearing ratio of 62 percent in 2023. Exorbitant hike in finance cost wiped off ASTL’s operating profit and resulted in net loss of Rs.678.44 million in 2023 with loss per share of Rs.2.35.
ASTL’s topline plummeted by 14.76 percent in 2024 to clock in at Rs. 38,775.74 million. This was due to diminished investment in infrastructure projects owing to unparalleled hike in discount rate and energy prices, high inflation, political and economic unrest and shrunken pockets of customers.
Entry of new competitors in the northern region also created intense rivalry in the market. ASTL sold 174,071 metric tons of prime rebars in 2024, down 20.25 percent year-on-year.
Due to lower capacity utilization, fixed cost remained unabsorbed which coupled with elevated energy tariff and Pak Rupee depreciation resulted in 59.72 percent drop in gross profit in 2024 with GP margin falling down to its lowest level of 6.19 percent.
The company was unable to pass on the impact of high cost to its consumers due to increased competition. Higher freight charges due to soaring fuel cost and the implementation of axle load resulted in 10.49 percent surge in distribution expense in 2024. Administrative expense also mounted by 12.15 percent in 2024 due to higher payroll expense on account of inflationary pressure.
The company squeezed its workforce from 749 employees in 2023 to 662 employees in 2024. Allowance for doubtful debt multiplied by 217 percent in 2024 due to increasing default rates keeping in view the deteriorating macroeconomic conditions. 136.89 percent growth in other expense recorded in 2024 was the result of loss incurred on the sale of property, plant & equipment, exchange loss as well as detention charges incurred during the year.
Other income also dipped by 62 percent in 2024 due to lower profit recognized on TDRs. ASTL recorded operating loss of Rs.130.79 million in 2024.
Finance cost grew by 18.34 percent in 2024 due to higher discount rate and increased short-term borrowings. This translated into gearing ratio of 65 percent in 2024. ASTL’s net loss magnified by 800.11 percent to clock in at Rs.6106.72 million in 2024 with loss per share of Rs.20.56.
2025 was another survival year for ASTL as its topline dipped by 58.52 percent to clock in at Rs.16,082.61 million.
Export sales represented only 1.7 percent of the total net revenue of the company versus its share of 0.7 recorded in 2024.
While weak demand and increased competition including the smuggling of steel products from the neighboring countries were the risk factors on the demand side, the sharp decline in sales during the year was also greatly contributed by abridged production volumes as the company couldn’t open L/Cs for the procurement of scrap – its basic raw material. Sales volume declined by 66 percent in 2025.
High energy cost as well as inefficient absorption of fixed cost due to record low capacity utilization of 11.75 percent (versus 27.84 percent in 2024) resulted in 96.83 percent shrinkage in gross profit in 2025 with GP margin falling down to its lowest level of 0.47 percent. As of June 30, 2025, ASTL’s current ratio fell below 1:1 which was required to be maintained as per its loan agreements.
Due to the breach of this condition, the company’s long-term loans along with subsidized loan were classified as current in accordance with the requirements of IAS-I “Presentation of financial statements”. During the year, the company was in the process of restructuring its loan and had to shut down its plant located at Shershah due to unstable financial position.
Distribution expense dropped by 50.98 percent in 2025 particularly due to lesser carriage and transport charges incurred owing to petite sales volume. Administrative expense also plunged by 12.45 percent in 2025 on account of thinner payroll expense as the company streamlined its workforce from 662 employees in 2024 to 345 employees in 2025.
The company booked reversal of provision worth Rs.86.73 million against ECL in 2025 versus provisioning of Rs.379.21 million done against ECL in 2024. Other expense mounted by 168.58 percent in 2025. This was due to overhead expenses related to Shershah plant which remained idle during the year. Another major cause of elevated other expense in 2025 was impairment loss on fixed assets and detention charges
Other expense was conveniently offset by other income of Rs.592.80 million recorded in 2025, up from other income of Rs.3.16 million recorded in 2024. Robust other income was on the back of gain recognized on the sale of operating fixed assets, higher profit on saving accounts and gain on termination of lease. ASTL incurred operating loss of Rs.1063.33 million in 2025, up 713 percent year-on-year.
Finance cost slid by 14 percent in 2025 due to lower discount rate. While profit before tax recorded in 2025 was 5.31 percent higher than that recorded in 2024, deferred tax adjustments against carried forward taxable losses and minimum taxes resulted in 37.59 percent slide in net loss which clocked in at Rs.3811.359 million in 2025. This translated into loss per share of Rs.12.83 in 2025.
Recent Performance (1HFY26)
During the first half of the ongoing fiscal year, ASTL recorded 18.75 percent slide in its net sales which clocked in at Rs.7150.45 million. This was on the back of weaker demand and competitive pressure. Increased competition also compelled the company to reduce the rebar prices which resulted in shrunken margins.
During the period under review, the company also executed its Master Restructuring Agreement (MRA) with the banking syndicate which resulted in opening on L/Cs for essential raw materials and led to the resumption of operations. Owing to pricing pressure, ASTL recorded gross loss of Rs.289.98 million in 1HFY26 versus gross profit of Rs.245.82 million recorded in 1HFY25.
Distribution expense tumbled by 8.72 percent in 1HFY26 owing to thinner sales volume. Conversely, administrative expense ticked up by 9.97 percent likely due to the revision of minimum wage rate as well as legal & professional charges owing to restructuring arrangement.
As against reversal of Rs.57.53 million on ECL recorded in 1HFY25, ASTL registered allowance for ECL worth Rs.17.68 million in 1HFY26. Other expense multiplied by 237.13 percent in 1HFY26 perhaps due to profit related provisioning booked during the period.
Other income strengthened by 780.49 percent in 1HFY26 conceivably due to improved liquidity condition (resumption of external financing and equity injection by the sposnors) and realized and unrealized profit on non-current assets held for sale.
In order to meet its working capital requirements, the company decided to sell its Karachi and Lahore plots and warehouses. Operating loss escalated by 35 percent to clock in at Rs.474.188 million in 1HFY26.
Finance cost slid by 16.54 percent in 1HFY26 due to monetary easing and benefits from restructuring arrangement.
Another notable factor which led to the turnaround of the company financial performance at the pre-tax level was the recognition of one-time accounting gain worth Rs.3072.65 million from the modification of its loan terms. This enabled the company to post net profit of Rs.1174.199 million in 1HFY26 versus net loss of Rs.1873.06 million registered in 1HFY25.
EPS clocked in at Rs.3.78 in 1HFY26 versus loss per share of Rs.6.31 posted in 1HFY25. NP margin was recorded at 16.42 percent in 1HFY26.
Future Outlook
While the macroeconomic conditions boast notable improvement in the recent past, the revival in the demand of steel sector will take time given deteriorated investor confidence, weakened purchasing power of consumers and increased competition.
Demand recovery will also depend on the timely disbursement of PSDP allocation. On the positive front, the steel manufacturers have successfully negotiated the reduction in tax exemptions granted to FATA/PATA region which will create a level playing field in the steel industry.
Decline in steel demand due to recession in the major economies have resulted in lower prices of steel in the international market.
However, this puts the local manufacturers at the competitive disadvantage due to high conversion cost in the country.
Furthermore, escalating tension in the Middle Eastern region pose immense risk to energy importing countries including Pakistan.
Any disruption in oil supply chain will lead to fuel price hikes resulting in inflationary pressure bouncing back. This could also result in tighter monetary stance and exchange rate volatility which can greatly affecting the industrial input prices.
Copyright Business Recorder, 2026