Islamabad, 16 Apr 2025: Amreli Steels Limited stands as a pioneering force in Pakistan’s construction-grade steel industry, having been established in 1984 and later transformed into a public limited entity in 2009.
As a front-runner in the production and distribution of premium steel rebars and billets, the company continues to build the nation’s infrastructure backbone.
Strategic Developments over the years have positioned Amreli Steels Limited as a key player, although it has faced several cyclical challenges.
The company’s ownership structure remains concentrated, with over 56% of its shares controlled by directors and their immediate families, while related parties and institutional investors hold the remainder.
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This tight grip reflects a strong internal influence on decision-making, which has helped steer the company through Pakistan’s volatile economic climate.
Between 2019 and 2024, Amreli Steels Limited experienced a fluctuating revenue trajectory. In 2019, its revenues surged by 84%, backed by robust demand and volume growth.
However, escalating input costs primarily driven by currency devaluation and energy hikes eroded profit margins.
This volatility worsened in 2020 as COVID-19-induced shutdowns shrunk sales volumes and increased financial pressure, pushing the company into a net loss.
A remarkable turnaround occurred in 2021 as pent-up construction demand and efficient cost recovery strategies revived sales and profits.
Yet, this momentum couldn’t be sustained. While 2022 saw revenue expand due to price hikes, the benefit was offset by surging raw material costs and inflationary burdens.
By 2023 and 2024, geopolitical instability, economic uncertainty, high borrowing costs, and reduced infrastructure investments drove down both sales and profits.
Notably, 2024 ended with a significant net loss, intensified by increased competition and the inability to fully pass on costs to consumers.
Strategic Developments in the first half of FY25 reveal a concerning trend. Revenues nosedived by over 60% due to muted construction activity and market share erosion by illegal imports.
The company also had to temporarily close its Shershah plant amid mounting financial constraints.
While distribution and admin expenses declined, the sharp contraction in gross margins and rising finance costs led to another substantial net loss.
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Looking ahead, Amreli Steels Limited faces the dual challenge of reviving investor trust and regaining operational strength.
Although macroeconomic indicators are showing signs of stability, meaningful recovery in steel demand remains distant.
Persistently high conversion costs, illegal market competition, and subdued infrastructure spending continue to limit the company’s turnaround prospects in the near term.
