BECO

⚡ Flash Summary

Beco Steel Limited’s corporate briefing highlights significant revenue growth and improved profitability in 2025. Sales surged by 140% to PKR 7.45 billion, driving a return to profitability with a net profit of PKR 111.48 million. The company has also improved its liquidity and cash flow from operating activities. Despite these achievements, Beco Steel faces challenges from volatile raw material prices, intense competition, and the need for continuous technological upgrades.

📌 Key Takeaways

• ⬆️ Sales increased by 140% to PKR 7.45 billion in 2025.
• ✅ Returned to profitability with PKR 111.48 million profit after tax.
• 💰 EPS improved to 0.89 Rupees from (0.73) Rupees.
• 📈 Gross profit increased by 73% to PKR 386.26 million.
• 📉 Administrative expenses decreased by 57%.
• 🚀 Distribution and selling expenses increased significantly by 469%.
• 💸 Operating profit increased by 455% to PKR 223.71 million.
• 👍 Interest coverage ratio improved to 36.721.
• 💪 Debt/Equity ratio remained stable at 0.040.
• 🌱 Return on Assets (ROA) turned positive in 2025.
• 📊 Return on Equity (ROE) showed significant improvement.
• 💵 Gross Profit Ratio improved to 0.052.
• ✅ Current Ratio improved to 0.93 from 0.76.
• ✅ Quick Ratio improved to 0.39 from 0.29.
• 🏦 Total Equity increased by 4.50% to 3,225,759,928 Rupees.

🎯 Investment Thesis

Beco Steel is a BUY. The company’s significant revenue growth, return to profitability, and improved financial health make it an attractive investment. While challenges related to raw material prices and competition exist, the company’s strategic investments in property, plant, and equipment, as well as its focus on operational excellence, position it for continued success. The positive trend in profitability and liquidity ratios supports a positive outlook for the stock.

⚡ Flash Summary

Beco Steel Limited’s Corporate Briefing Session 2025 highlights a year of significant milestones and ongoing challenges. The company achieved a record high of PKR 7.4 billion in net revenue and returned to profitability with a PKR 111 million profit after tax. Beco Steel has also improved liquidity, demonstrating operational efficiency through increased cash flow from operating activities. However, it faces challenges such as volatile raw material prices, intense competition, the need for technological upgrades, and managing debt for long-term stability.

📌 Key Takeaways

• 🔥 Achieved a record net revenue of PKR 7.4B in 2025.
• ✅ Returned to profitability with a PKR 111M profit after tax in 2025.
• 💧 Strengthened liquidity with improved current and quick ratios.
• 💸 Increased cash flow from operating activities.
• 📈 Total Equity increased by 4.50% to 3,225,759,928 Rupees in 2025.
• 📊 Total Non-Current Liabilities increased by 8.33% to 134,221,632 Rupees in 2025.
• 🧾 Total Current Liabilities increased by 8.50% to 4,305,751,279 Rupees in 2025.
• 🌱 Positive Return on Assets (ROA) and Return on Equity (ROE) trends in 2025.
• 💰 Gross Profit Ratio increased from (0.005) in 2023 to 0.052 in 2025.
• ⚡️ Current Ratio improved from 0.76 in 2023 to 0.93 in 2025.
• 🚀 Quick Ratio increased from 0.29 in 2023 to 0.39 in 2025.
• 📉 Net Working Capital Ratio improved from (0.11) to (0.04) in 2025, but remains negative.
• ✔️ Interest Coverage Ratio improved to 36.721 in 2025.
• ⚖️ Debt/Equity Ratio stable at 0.040 in 2025.
• 💰 Cash flow from operating activities increased by 61% to 242,412,519 Rupees in 2025.

🎯 Investment Thesis

Beco Steel’s return to profitability and improved financial metrics in 2025 make it an interesting investment opportunity. However, the risks associated with the steel industry and the company’s challenges require a cautious approach. A HOLD recommendation is appropriate at this time, pending further analysis of the company’s ability to manage its debt, control costs, and sustain its growth momentum. A price target will be re-evaluated after assessing these factors over the next 6-12 months.

⚡ Flash Summary

BECO Steel Limited reports a remarkable financial turnaround for the quarter ended September 30, 2025. The company achieved a substantial increase in turnover, reaching Rs. 2,316.598 million, compared to Rs. 446.119 million in the same period last year. Gross profit significantly improved to Rs. 223.663 million from Rs. 63.137 million. This performance translated into a net profit after tax of Rs. 149.955 million, resulting in an Earnings Per Share (EPS) of Rs. 1.20, a significant leap from Rs. 0.01 in the previous year, indicating improved operational efficiency and cost control.

📌 Key Takeaways

• 📈 Turnover increased to Rs. 2,316.598 million, a significant rise from Rs. 446.119 million YoY.
• 💰 Gross profit surged to Rs. 223.663 million, compared to Rs. 63.137 million YoY.
• ✅ Net profit after tax reached Rs. 149.955 million, a substantial turnaround.
• 💯 EPS jumped to Rs. 1.20, a significant improvement from Rs. 0.01 YoY.
• ⚙️ Improved operational efficiency and cost control contributed to higher profitability.
• 🌱 Management is focused on process optimization and energy efficiency.
• 📊 Stable raw material prices and effective inventory management supported growth.
• 🌍 The company aims to explore new markets and broaden its product range.
• 🛡️ Continued efforts toward innovation and risk management are prioritized.
• 🤝 The Board expressed gratitude to employees, shareholders, customers, and suppliers.
• 💪 Beco Steel Limited exhibits resilience and adaptability despite challenges.
• 🏦 The company has relationships with six major banks, including JS Bank and Meezan Bank.
• 📜 The company obtained SECP approval for issuing shares against non-cash assets in January 2022.
• 🏢 The company is completing legal formalities for transferring non-cash assets for share issuance.
• 🗓️ The report is for the quarter ended September 30, 2025, dated October 30, 2025.

🎯 Investment Thesis

Based on the impressive turnaround, substantial revenue growth, and improved profitability, a BUY recommendation is warranted. The company has demonstrated significant operational improvements and is committed to sustainable growth. With continued efforts in innovation and risk management, the company can achieve long-term value creation. The price target will depend on future growth expectations and sector valuation multiples. The time horizon would be medium to long term, assuming sustained performance and effective management.

⚡ Flash Summary

Beco Steel Limited announced that it is now positioned to be included in the approved vendor list for various WAPDA and Distribution Companies (DISCOs). This allows the company to directly supply steel angles used in electric transmission poles and related infrastructure for power and infrastructure projects, which were previously supplied through indirect vendors. This inclusion is expected to strengthen the company’s presence in the power sector and contribute positively to sales, profitability, and overall market share. The management remains committed to expanding its customer base and enhancing shareholder value.

📌 Key Takeaways

• ✅ Beco Steel to directly supply steel angles to WAPDA and DISCOs
• ⚡ Supplies are for electric transmission poles and infrastructure.
• 📈 Expects positive impact on sales and profitability.
• 🏢 Aims to strengthen presence in the power sector.
• 🤝 Formerly supplied via indirect vendors.
• 🚀 Targeting expansion of customer base.
• ⭐ Committed to high quality standards.
• 🌱 Pursuing growth opportunities for shareholder value.
• 📜 Compliant with Sections 96 and 131 of the Securities Act, 2015.
• 💼 Disclosure under Clause 5.6.1(a) of PSX Rule Book.

🎯 Investment Thesis

BUY. The inclusion in the approved vendor list presents a strong growth opportunity for Beco Steel. The ability to directly supply to WAPDA and DISCOs is likely to increase revenue and profitability. The company’s commitment to quality and growth suggests a positive outlook. Price target: PKR 30 (based on projected revenue growth), Time horizon: 12 months.