Agha Steel Industries Limited (AGHA) was incorporated in Pakistan as a private limited company in 2013 and was converted into a public listed company is 2015.
The company is engaged in the production of steel bars, wire rods and billets
Pattern of Shareholding
As of June 30, 2025, AGHA has 604.879 million shares outstanding which are held by 6521 shareholders. Directors, their spouse and minor children have a majority stake of over 48.80 percent in the company followed by local general public holding 42.10 percent of AGHA’s shares.
Modarabas & Mutual funds account for 4.46 percent of the company’s shares while banks, DFIs and NBFIs hold 1.68 percent shares.
The remaining shares are held by other categories of shareholders.
Historical Performance (2021-25)
AGHA’s topline which rode an upward trajectory in 2021 and 2022 began to decline thereafter. Its bottomline staggeringly grew in 2021, however, followed a downhill journey after that. AGHA posted net loss in 2024 and 2025.
The company’s gross margin dropped in 2021 and 2022, followed by an uptick in 2023. In the following years, AGHA’s gross margin posted a negative value. Conversely, its operating and net margins strengthened in 2021, however, drastically fell thereafter (see the graph of profitability ratios).
The detailed performance review of the period under consideration is given below.
In 2021, Pakistan’s economy showed signs of recovery post the slowdown period of Covid-19. AGHA’s net sales grew by an impressive 47.90 percent year-on-year to clock in at Rs.19,858.24 million in 2021 on account of real estate boom.
However, GP margin sank from 25.30 percent in 2020 to 22.67 percent in 2021 as China, the top producer of steel, withdrew 13.50 percent tax rebate to its steel industry. While the prices sky rocketed, the global steel production rose by 9 percent year-on-year to clock in at 1.96 billion metric tons.
The steep rise in electricity tariff during the year also squeezed AGHA’s GP margin in 2021. Administrative expense inched up by 10 percent in 2021 due to higher payroll expense as the company expanded its workforce from 258 employees in 2020 to 310 employees in 2021.
Fee & subscription charges also grew during the year as the company completed its listing process. Selling & distribution expense spiked by 33.72 percent in 2021 due to higher salaries of sales force, carriage & freight charges as well as advertising & marketing expense incurred during the year.
In 2021, finance cost decreased by 17.24 percent year-on-year in 2021 owing to stable exchange rate and stagnant discount rate.
AGHA’s outstanding borrowings also dropped during the year as the company got listed on the Pakistan Stock Exchange and raised Rs.3.84 billion from institutional investors, high net worth individuals and general public.
Operating profit strengthened by 107.36 percent in 2021 with OP margin clocking in at 12.65 percent versus OP margin of 9 percent posted in 2020. Other income didn’t perform well in 2021 as markup on loan to associate companies which was the major head of “other income” until 2020 faded away in 2021 owing to low discount rate. Other expense also mounted by 72.29 percent in 2021 due to higher profit related provisioning and impairment loss booked on trade receivables.
AGHA recorded 64.78 percent year-on-year growth in its net profit which clocked in at Rs.2036 million in 2021 with EPS of Rs.3.62 versus EPS of Rs.2.96 recorded in the previous year. NP margin also strengthened from 9.20 percent in 2020 to 10.25 percent in 2021.
2022 was a rollercoaster ride for the steel industry. International steel prices touched an all-time high level of $1100 and then collapsed by 40 percent. The prices of major raw materials such as iron ore and coal also showed significant downward adjustments after peaking to an unsurpassed level. This was because of the demand uncertainty on the back of Russia-Ukraine conflict and a general economic slowdown.
Talking about the local scenario, energy slippages, high inflation, multiple discount rate hikes, dwindling foreign exchange reserves and sharp depreciation of Pak Rupee as well as devastating floods in the southern region of the country, the demand from the public and private sector remained subdued.
AGHA’s net sales grew by 29.16 percent to clock in at Rs.25,647.95 million in 2022. During the year, the company also commenced the production & sale of liquid gases.
However, high international prices of raw material for most part of the year coupled with Pak rupee depreciation resulted in a thinner GP margin of 21.41 percent in 2022. Gross profit in absolute terms grew by 21.94 percent in 2022. Administrative expense ticked up by 12.76 percent in 2022 due to higher payroll expense as number of employees surged to 395 employees in 2022.
Selling & distribution expense spiked by 23.91 percent in 2022 due to excessive salaries of sales force, carriage & freight charges, advertising & marketing expense as well as brokerage charges incurred during the year.
Finance cost surged by 51.59 percent year-on-year in 2022 on account of higher discount rate and increased borrowings. This pushed OP margin down to 10.40 percent in 2022 vis-à-vis OP margin of 12.65 percent recorded in the previous year.
In absolute terms, operating profit ticked up by 6.16 percent in 2022. Other expense gave another major blow to the bottomline as it grew by 245 percent in 2022 on account of exchange loss and impairment loss on trade receivables recorded during the year.
Other income lent a helping hand to the bottomline and grew by 26.67 percent in 2022 as the company made massive profit from its air separation unit.
In 2022, AISL installed an air separation unit from IPO proceeds of 2021. The bottomline of AISL shrank by 8.90 percent year-on-year in 2022 to clock in at Rs.1854.77 million with EPS of Rs.3.07 and NP margin of 7.23 percent.
In 2023, AGHA posted 19.75 percent year-on-year decline in its net sales which clocked in at Rs.20,582.21 million. This was on account of political uncertainty, unprecedented level of inflation and discount rate, elevated energy tariff, unfavorable exchange rate parity and import restrictions which squeezed the industrial activity by 25 percent.
High international scrap prices coupled with Pak Rupee depreciation also took toll on the gross profit by 12.21 percent in 2023.
On the positive front, GP margin slightly improved to clock in at 23.42 percent in 2023 due to upward price revisions. Administrative expense dropped by 7 percent in 2023 due to austerity measures put in place by the company.
One of those measures was downsizing from 395 employees in 2022 to 350 employees in 2023. Selling & distribution expense plunged by 9.57 percent in 2023 due to considerable decline in advertising & marketing budget for the year.
Despite lower sales volume recorded in the year, carriage & freight charges continued to enlarge owing to a spike in the prices of POL products.
Finance cost multiplied by 50.23 percent in 2023 due to higher discount rate. Overall borrowings dipped during the year as evident in the gearing ratio of 58 percent recorded in 2023 versus gearing ratio of 60 percent in the previous year.
Operating profit tapered off by 63.22 percent in 2023 with OP margin drastically falling down to 4.76 percent.
AGHA recorded 76 percent decline in its other expense in 2023 which was the result of lower profit related provisioning and lesser impairment loss booked on trade receivables.
Other income grew by 15.78 percent in 2023 which was due to higher profit recognized from air separation unit and higher markup income recognized from loan to associates.
Despite all the measures undertaken to control its cost and operating expense, AGHA recorded 51.21 percent slump in its net profit which clocked in at Rs.904.896 million in 2023 with EPS of Rs.1.5 and NP margin of 4.40 percent.
In 2024, AGHA’s topline recorded a massive decline of 33.48 percent to clock in at Rs.13,691.82 million. This was due to stagnated construction activity in the country owing to exorbitant construction costs on account of fluctuating international prices of raw materials, import restrictions, Pak Rupee depreciation, heightened energy tariff, gas supply constraints and frequent power shortages.
Poor politico-economic backdrop and shattered investor confidence also pushed down the performance of long steel industry.
Tax exemptions provided to FATA/PATA region which was initially aimed to promote development have widely been misused by selling steel across the country without paying taxes. This gobbled up the share of the legitimate steel producers.
Despite constrained sales volume, cost of sales only dropped by only 9.15 percent in 2024, resulting in gross loss of Rs.628.31 million recorded in 2024.
Administrative expense ticked up by 5.86 percent in 2024 due to higher payroll expense which was the result of inflationary pressure as the number of employees stood intact at 350 in 2024.
Distribution expense nosedived by 12.43 percent in 2024 due to lower carriage & freight as well as brokerage charges incurred during the year owing to lower sales volume.
Finance cost surged by 42.81 percent in 2024 due to higher discount rate and higher working capital related borrowings.
Nevertheless, gearing ratio fell to its lowest level of 48 percent in 2024 due to increase in the authorized capital by issuance of preference shares as well as surplus recorded on the revaluation of fixed assets.
AGHA recorded a hefty operating loss of Rs.5819.865 million in 2024. Other expense rose by a drastic 1387.22 percent in 2024 due to provision booked for writing down stock-in-trade to NRV. This was necessary as the company encountered fire incident during the year.
The company also booked impairment loss on damaged fixed assets and trade receivables during the year. Other income grew by 86.58 percent in 2024 due to insurance claim and higher markup income on loan to associates.
AGHA recorded net loss of Rs.5088.565 million in 2024 with loss per share of Rs.8.41.
In 2025, AGHA’s topline further deteriorated by 22 percent to clock in at Rs.10,674.62 million. This was due to thinner demand of long steel products in the local market due to low purchasing power of consumers, restricted construction financing and unregulated subsidized imports in the FATA/PATA region. AGHA made no export sales of Iron ore in 2025.
Demand destruction coupled with the volatility in the prices of global scrap and billet, elevated energy cost and Pak Rupee depreciation resulted in gross loss of Rs.1977.49 million in 2025, up 214.73 percent year-on-year.
Administrative expense surged by 60.65 percent in 2025. While payroll expense dipped during the year as number of employees drastically fell from 350 in 2024 to 270 in 2025, radical spike in legal & professional charges and hefty Port Qasim Authority charges incurred during the year were the main culprits behind elevated administrative expense in 2025.
The port charges worth Rs.94.786 million were recognized in lieu of land use, annual maintenance and non-utilization fee for the period of 2017 to 2024.
Distribution expense escalated by 25.34 percent in 2025 due to higher carriage & freight charges as well as brokerage charges incurred during the year.
Monetary easing resulted in 8.42 percent downtick in finance cost in 2025. Operating loss mounted by 21.20 percent to clock in at Rs.7053.92 million in 2025.
Other expense dipped by 56.54 percent in 2025 due to high-base effect as the company recorded provision for write down of inventory to NRV and impairment loss on damaged fixed assets in the previous year.
In 2025, other expense only comprised of impairment loss on trade receivables. Other income also deteriorated by 62.15 percent in 2025 as the company recognized insurance compensation in the previous year.
Profit from air separation unit also thinned down in 2025. During the year, the company reversed the provision worth Rs.164.352 million booked for write down of finished goods to NRV following the sale of finished goods during the year. This was also reflected in other income in 2025.
Net loss escalated by 41.72 percent to clock in at Rs.7211.418 million in 2025. This translated into loss per share of Rs.11.92 in 2025.
Recent Performance (9MFY26)
During the first quarter of the ongoing fiscal year, AGHA’s net sales dropped by 9.35 percent to clock in at Rs.7324.951 million. This was because of slowdown in the construction and real-estate activity and surge in the import of scrap and finished steel.
Cost of sales dipped by 9.05 percent in 9MFY26 – lesser than the decline in net sales – due to elevated energy cost and volatility in the prices of global scrap and billet. Intense competition from FATA/PATA region didn’t allow the company to revise its prices.
The company recorded gross loss of Rs.1088.94 million in 9MFY26, down 6.95 percent year-on-year.
Administrative expense plunged by 35.46 percent in 9MFY26 apparently because the company has been aggressively streamlining its workforce since 2023. Distribution expense also shrank by 23 percent in 9MFY26 due to lower sales volume.
Monetary easing resulted in 31.43 percent drop in finance cost in 9MFY26. AGHA recorded 25.95 percent thinner operating loss to the tune of Rs.3993.56 million in 9MFY26. Other expense fell by 89.66 percent in 9MFY26 probably due to lower impairment loss on trade receivables.
Other income also fell by 84.41 percent in 9MFY26 seemingly due to lower profit on bank deposits and lower profit from air separation unit.
Net loss tumbled by 47.19 percent to clock in at Rs.2730.44 million in 9MFY26. This translated into loss per share of Rs.4.51 in 9MFY26 versus loss per share of Rs.8.55 recorded in 9MFY25.
Future Outlook
Withdrawal of FATA/PATA exemptions is a positive omen for the local steel industry. Reconstruction and rehabilitation in the flood affected areas may also spur demand.
On the flipside, with sustained decline in the purchasing power of consumers, high property prices, excise duties and taxes as well as wavering consumer confidence, residential construction doesn’t promise any sound recovery.
The company is in the process of restructuring its loans which is expected to improve its liquidity position as short-term loans will be converted into long-term obligations with 10-year tenor.
The company will also complete Mi.Da rolling mill project from available insurance proceeds and internal cash flow generation. This will buttress its operational efficiency.