FOULAD Fundamental Analysis, Mehr 1405: Profit Forecast and Valuation

Fundai Fundamental Analysis Team · October 8, 2026 · 21 min read

Last updated: October 25, 2026, 01:30

This article is updated as new reports come in.

Fundamental analysis of Mobarakeh Steel of Isfahan based on separate financial statements, monthly reports, profit margin and the company's own estimate on Codal.

In this article we examine the fundamental analysis of FOULAD, that is, the fundamental position of Mobarakeh Steel Company of Isfahan, traded under the symbol FOULAD. FOULAD also publishes consolidated reports, but every figure in this article comes from the parent company's separate financial statements. Using the monthly reports published on the Codal system, we assess the trend in revenue and profitability, the state of the profit margin, the factors affecting future performance and the company's valuation ratios. Finally, based on the financial information published up to 30 Mehr 1405, we review the profit outlook and the main opportunities and risks of this symbol.

3 key points in the fundamental analysis of FOULAD

1. Introduction to Mobarakeh Steel Company of Isfahan and its industry

Mobarakeh Steel Company of Isfahan (FOULAD) is one of the companies in the steel chain group and trades on the Tehran Stock Exchange with 1,935 billion shares; its fiscal year closes at the end of Esfand.

The sales basket includes hot-rolled products, cold-rolled products, coated products, pellets, slab and sponge iron, and the company both sells these products on the domestic market and exports them. In the first 6 months of fiscal year 1405, hot-rolled products (domestic and export) alone made up 43.5% of the domestic and export sales in the monthly reports. So the company's profitability depends, more than on anything else, on the price and sales volume of this one product. For a sense of the group's scale, according to the audited consolidated financial statements on Codal, the Mobarakeh Steel group's consolidated operating revenue in the fiscal year ending 29 Esfand 1402 amounted to 3,002,768,610 million rials (more than 300 thousand billion tomans); this figure is consolidated and is not comparable with the separate figures in this article's tables.

FOULAD's market capitalization on 29 Mehr 1405 reached 816,570 billion tomans. According to the capital increase registration notice on Codal, which appears on the Rahavard 365 capital page, the company's capital had reached 1,500,000 billion rials at one stage through a 38.89 percent increase from retained earnings, and according to the latest financial statements the company's current registered capital is 193,500 billion tomans (equal to 1,935 billion shares).

On the cost side, the largest raw material purchase in the 6 months ending Shahrivar 1405 was slab, at 42.3% of the purchase amount. The price of this input therefore affects cost of goods sold more than any other.

You can see the revenue and product mix in the "At a glance" section of the FOULAD page on Fundai; the company's position in its industry is also covered on the steel chain industry page.

2. Review of the monthly reports and FOULAD's sales trend

FOULAD's sales in the first 6 months of fiscal year 1405 were 250,942.2 billion tomans, 64.1% more than in the same period last year (152,895.5 billion tomans). According to the FOULAD monthly reports, this figure has even passed two thirds of the previous fiscal year's total sales (366,886.0 billion tomans).

Of the 187,977.7 billion tomans in domestic and export sales, 92.0% (172,934.5 billion tomans) went to the domestic market and 8.0% (15,043.2 billion tomans) was exports. The export share in the same period last year was 18.1%; in other words, this year's growth came almost entirely from the domestic market.

Shahrivar 1405 sales reached 63,941.8 billion tomans, 17.5% above Mordad (54,427.2 billion tomans) and 151.2% above Shahrivar 1404 (25,451.2 billion tomans). Of this year's 6 months, 4 months got ahead of the same month last year; Farvardin and Ordibehesht fell behind, and from Khordad onward the gap turned in this year's favor. The chart above puts each month next to the same month last year.

The table above orders the products by their share of cumulative sales and compares the Shahrivar price with Mordad 1405 and Shahrivar 1404. Each product's price is obtained by dividing that month's sales amount by that month's sales volume.

The price of hot-rolled products (domestic) in Shahrivar 1405 reached 92,125.6 million tomans per thousand tons; 2.1% above the previous month and 159.9% above Shahrivar 1404. On the volume side, this product's cumulative 6-month sales were 841 thousand tons, against 1,493 thousand tons in the same period last year; so on a cumulative basis, the fall in sales volume has run up against a jump in price in recent months.

"No sales" in the table means the product recorded no sales in that month and that market.

Part of FOULAD's domestic sales takes place on the Iran Mercantile Exchange, and because each month's trades close before that month's monthly report is published on Codal, the FOULAD Iran Mercantile Exchange figures give a preview of the next report. These figures capture only domestic rial trades, so we checked them against the "total domestic sales" in the Codal reports. In recent months the two figures have been close: in Shahrivar 1405, domestic rial sales on the Iran Mercantile Exchange were 47,098.1 and domestic sales in the Codal report were 43,253.1 billion tomans (8.9% higher on the Iran Mercantile Exchange), and in Mordad 1405 the Iran Mercantile Exchange had 38,012.3 and Codal 39,934.2 billion tomans (4.8% lower on the Iran Mercantile Exchange). Not every month is this close: in Azar 1404, Iran Mercantile Exchange sales were 41,178.2 and domestic sales in the Codal report were 16,084.0 billion tomans, that is, 2.6 times. So in the fundamental analysis of FOULAD, treat these figures as a guide to the trend, not a copy of the reported figure.

The Iran Mercantile Exchange is closed for Mehr 1405 (last trade 29 Mehr). Domestic rial sales on the Iran Mercantile Exchange in Mehr 1405 were 42,652.8 billion tomans, against 47,098.1 billion tomans in Shahrivar 1405; 9.4% lower. The volume of these trades also fell from 391,000 tons in Shahrivar to 331,500 tons in Mehr, 15.2% lower. If the pattern of recent months repeats, the domestic sales in the Mehr report on Codal will also come in below Shahrivar (43,253.1 billion tomans); these figures do not show its exact size, however.

FOULAD alongside the basic metals industry

To see how much of FOULAD's growth belongs to the company itself, we compared its monthly sales with its own industry. In this section, "industry" means the companies of the basic metals industry (57 members, including FOULAD itself) that filed the monthly report for that month and whose sales in the same month last year were positive (49 companies in each of the three months Tir to Shahrivar 1405); industry growth is the growth of the total sales of these same companies. This population takes in all companies of the group, not just the 8 large companies of the same group that appear in Section 5. In all three months FOULAD had the industry's second-largest sales, behind FEMELY; but its share of industry sales went from 24.3% in Tir to 23.0% in Mordad and 22.6% in Shahrivar, meaning its position in the industry has weakened slightly month by month.

FOULAD's sales growth was below the whole industry's in all three months, although the gap narrowed: 46.6 percentage points in Tir (103.4% against 150.0%), 9.0 in Mordad and 5.3 in Shahrivar (151.2% against 156.5%). Against the median company growth the picture is better: in Tir FOULAD was below the median (103.4% against 148.6%), but in Mordad and Shahrivar it moved above it (148.0% against 134.7% and 151.2% against 149.7%). FOULAD's growth rank was 32, 24 and 24 of 49 companies; that is, slightly above the middle of the table in the last two months, not ahead of it. One point should not be overlooked: the median company growth over these three months ranged between 134.7% and 149.7%, so a large part of the whole industry's growth comes from the effect of prices and the exchange rate, which lifted all companies. The meaningful signal for FOULAD is not the growth figure itself but its gap with the industry, and that gap is still to FOULAD's disadvantage.

Among the industry's 8 largest companies by Shahrivar sales, FOULAD grew faster only than FAKHUZ (137.6%) and SISKO (62.0%); FEMELY (274.9%), FAIRA (221.4%), HORMOZ (198.4%), FJAHAN (181.5%) and FULAZH (412.3%, on a much smaller base) were ahead of it. FEMELY sold 82,377.2 billion tomans, about 1.3 times FOULAD; FOULAD in turn had about 5.3 times the sales of FJAHAN, the third company on the list. Compared with the previous month, FOULAD's sales in Shahrivar rose 17.5% and the whole industry's 19.6%; in Mordad FOULAD grew 6.9% and the industry 13.0%, and in Tir FOULAD fell 6.6% while the industry fell 0.5%. So FOULAD is still the industry's second-largest company, but it is also moving forward more slowly than the industry month by month, and its share of industry sales is getting smaller.

3. Analysis of FOULAD's financial statements and profit margin

The income statements of the last 5 fiscal years show that FOULAD's revenue has risen much faster than its profit. According to the FOULAD income statement in the parent company's separate statements, annual operating revenue rose from 145,626.6 billion tomans in fiscal year 1400 to 366,886.0 billion tomans in fiscal year 1404. Net profit over the same period went from 84,030.6 to 100,300.1 billion tomans. In fiscal year 1404 revenue grew 32.8% and net profit only 0.7%.

Annual gross profit margin fluctuated between 29.1% and 51.8% over these 5 years. Operating revenue rose 151.9%, but cost of goods sold increased 270.4%. Cost ran faster than sales and pulled the gross margin down.

Quarterly and period profit margin

The gross profit margin for the quarter ending Shahrivar 1405 was 30.9%, against 27.9% in the previous quarter and 32.5% in the same quarter last year. In the history of this same quarter, the highest gross margin was 70.2% (year 1400) and the lowest 28.9% (year 1390), and the 19-year average is 41.8%; this quarter stands below the average and only 2.0 points above the lowest historical figure.

The net profit margin for the same quarter came to 28.1%, against 14.4% in the previous quarter and 11.5% in the same quarter last year. This quarter's highest net margin was 63.3% (year 1400) and the lowest 11.5% (year 1404), and the 19-year average is 34.7%. The last three quarters, with 47.4% in Esfand, 14.4% in Khordad and 28.1% in Shahrivar, show that FOULAD's net margin jumps around a great deal from one quarter to the next.

The latest interim report is a 6-month one and covers two quarters, so the period figure is compared only with the same period last year. The gross margin went from 30.1% to 29.9% and the net margin rose from 15.8% to 23.6%. The full trend is in the FOULAD profit margin history.

Gross profit margin of products

The gross margin of hot-rolled products (domestic), the largest revenue item, was 40.9% in the quarter ending Shahrivar 1405, against 45.1% in the previous quarter and 37.7% in the same quarter last year. The margins of coated products (domestic), hot-rolled products (export), slab (domestic), slab (export) and sponge iron (domestic) rose from the previous quarter. The margins of cold-rolled products (domestic), pellets (domestic) and cold-rolled products (export) fell.

What changed from the previous report?

The 6-month Shahrivar report shifted several key indicators in the fundamental analysis of FOULAD. The Shahrivar quarter alone had 167,525.5 billion tomans in revenue and 47,127.3 billion tomans in net profit; compared with the Khordad quarter (83,416.7 and 12,035.6 billion tomans), revenue rose 100.8% and net profit 291.6%, and earnings per share for this quarter went from 63 to 244 rials. The gross margin rose from 27.9% to 30.9% and the net margin from 14.4% to 28.1%. In Khordad net profit lagged far behind operating profit (19,799.5 billion tomans), but in Shahrivar it nearly caught up with it (48,198.9 billion tomans); these data do not break out the items below operating profit. The table below compares the main indicators with the previous version of this analysis; you can see the forecast comparison in Section 4.

The fall in P/E from 8.7 to 6.1 is less a sign that the stock got cheaper than the result of earnings catching up with the price: the price fell only 2.5% (from 4,330 to 4,220 rials), but twelve-month EPS rose from 497 to 693 rials, up 39.4%. The whole industry's P/E also went from 15.6 to 10.7; the ratio of FOULAD's P/E to the industry P/E was about 0.56 and stayed about 0.57, so FOULAD's relative gap with the industry is roughly the same. Among products, the gross margin of hot-rolled products (domestic) fell from 45.1% to 40.9% and of cold-rolled products (domestic) from 45.9% to 41.2%, but coated products (domestic) went from 23.1% to 69.3% (see the product margin table). The debt-to-assets ratio rose from 46.1% to 51.9%, still below the industry's 56.0%. FOULAD filed an amendment to its Shahrivar monthly report on 29 Mehr; the figures in this analysis are from the amended version, and no month's sales changed from the previous version of the analysis.

4. FOULAD profit forecast for fiscal year 1405

In its forecast published on Codal, the company estimated FOULAD's gross profit for fiscal year 1405 at 139,714.7 billion tomans. This estimate came with the 6-month (unaudited) financial statements ending Shahrivar 1405, and its latest version is the letter of 30 Mehr 1405. For the remaining 6 months, the company forecast the sales volume and amount of each product, cost of goods sold and general expenses. The "12-month estimate" column is also the sum of actual performance in the first 6 months and the estimate for the next 6 months. All these figures are the company's own estimates, not Fundai's analysis.

Estimated operating revenue

The company estimated full-year operating revenue at 668,803.2 billion tomans, 82.3% more than the previous fiscal year. In the first 6 months FOULAD sold 250,942.2 billion tomans, that is, 37.5% of the year's estimate at the halfway point; so sales stand slightly behind an even pace toward the estimate. This lag alone is not a sign of weakness, because Farvardin and Ordibehesht were weak and the recent months are stronger. To reach the estimate, the remaining 6 months have to sell 417,861.0 billion tomans, that is, 69,643.5 billion tomans a month on average (this figure is 417,861.0 divided by 6); Shahrivar was 63,941.8 billion tomans, so monthly sales would need to rise about 8.9% above Shahrivar.

Estimated cost of goods sold

Direct materials consumed is the largest component of cost of goods sold, and the company estimated it at 310,200.9 billion tomans for the full year. Total estimated cost of goods sold is 529,088.5 billion tomans, 103.5% more than the previous fiscal year. In this estimate, cost grows faster than revenue and takes the estimated gross margin from 29.1% in the previous fiscal year to 20.9%. The main weight falls on the remaining 6 months: their cost of goods sold is 353,129.8 billion tomans, about 2.0 times the first 6 months (175,958.7), while the remaining revenue is only about 1.7 times the first 6 months. The implied gross margin of these 6 months alone comes to 15.5%, against 29.9% in the first 6 months.

Estimated profit and loss and earnings per share

The company's forecast ends at gross profit and general expenses. Other income and expenses, finance costs and tax are not estimated in it; therefore full-year estimated earnings per share cannot be derived from this letter. Realized earnings per share for the trailing twelve months (TTM) is 693 rials; you can read how it is calculated in What is earnings per share (EPS) and how is it calculated?.

The key point of the assumptions table is the price gap, and it has reversed compared with the previous version. The company assumed hot-rolled products (domestic) at about 114,306.2 million tomans per thousand tons for the rest of the year, while the Shahrivar price was 92,125.6 million tomans; that is, the company's assumption is about 24.1% above the latest month's price. If prices stay near their current level, actual revenue could come in below the company's estimate; if prices rise, this gap narrows.

New forecast versus the previous forecast

The most important change in this version of the fundamental analysis of FOULAD is here: with the 6-month report, the company revised its fiscal year 1405 forecast. The table below puts the previous version (with the 3-month report, letter of 3 Mordad 1405) next to the new version (with the 6-month report, letter of 30 Mehr 1405).

Estimated revenue rose 9.7% and estimated gross profit 15.4%. Gross profit grew faster than revenue because the full-year estimated cost of goods sold rose only 8.2%; the estimated gross margin went from 19.9% to 20.9% and gross profit per share from 626 to 722 rials. Selling, general and administrative expenses were estimated at nearly double (88.3% more); in the first 6 months FOULAD had spent 10,745.0 billion tomans on this line, that is, 62.5% of the previous full-year estimate (17,188.4), and the new estimate is closer to this reality. But where did the jump come from? The next table shows each product's 12-month estimate.

The three large domestic products went up: hot-rolled products by 30,798.6 billion tomans (15.9%), cold-rolled products by 20,462.2 (16.1%) and coated products by 9,030.5 (24.4%); slab (domestic) also went from 2,779.8 to 16,610.8. On the other side, pellets fell 40.8% (18,408.7) and slab (export) 35.2% (7,661.9), offsetting a large part of these increases; that is why total revenue rose only 9.7% (58,911.9 billion tomans). No product was added to or removed from the forecast, only the sizes changed. For hot-rolled products (domestic), the full-year volume stayed almost the same (2,172 against 2,156 thousand tons) and the increase in amount came from price: the implied price of the remaining months went from 89,915.3 million tomans per thousand tons in the previous version (9 remaining months) to 114,306.2 in the new version (6 remaining months), that is, 27.1% higher. The Shahrivar price (92,125.6) was about 2.5% above the earlier assumption, but is now 24.1% below the new assumption; the remaining volume is also 1,314 thousand tons, about 1.6 times the 842 thousand tons of the first 6 months. The cautious conclusion is this: actual sales got past the previous estimate, but the new estimate again requires both a higher price and a higher volume. If prices stay near the Shahrivar level, the remaining hot-rolled sales will come in below the new estimate and a downward revision in the next report is possible; if the price rises, the estimate becomes more attainable. This is a condition, not our forecast.

5. FOULAD valuation and comparison with the industry

With a trailing twelve-month price-to-earnings (P/E) ratio of 6.1 times, FOULAD trades below both the whole-industry figure and the whole-market figure. On 29 Mehr 1405 FOULAD's closing price was 4,220 rials and its market capitalization was 816,570 billion tomans.

According to the FOULAD financial ratios, the whole-industry figure is 10.7 times and the whole-market figure is 7.2 times. The company's twelve-month price-to-sales (P/S) ratio is 1.8 times, against 3.1 for the industry and 1.7 for the market. The company's price-to-book (P/B) ratio is 2.2 times, against 5.1 for the industry and 3.2 for the market. The industry and market figures are ratios of two totals, that is, the market capitalization of the whole group divided by the profit or sales of the whole group, not a simple average of company ratios.

The chart puts FOULAD's P/E next to the 8 largest steel chain companies by market capitalization that have a P/E. The table below shows these same companies side by side with their valuation ratios.

FOULAD's twelve-month net profit margin is 29.3%, against 28.4% for the industry; so the company's lower P/E comes with a margin slightly above the industry's. Monthly reports after Shahrivar 1405 are not yet in TTM EPS. The PEGY indicator (P/E divided by the sum of operating profit growth and cash yield) for FOULAD is 0.08. A number below one means the P/E is not high relative to current profit growth; this only describes past growth and does not show that it will continue.

We have not calculated a forward P/E, because the company did not forecast the year's net profit. For a comparison with another company in the group, also read the FEMELY fundamental analysis, Mehr 1405.

6. Investment opportunities and risks in FOULAD

This article's data show three opportunities and four risks for FOULAD. Each item traces back to one of the figures in the earlier sections and can change with the company's next report.

Opportunities: This year's cumulative 6-month sales are 64.1% above the same period last year. Twelve-month earnings per share reached 693 rials with the 6-month report, and FOULAD's twelve-month P/E (6.1 times) stands below the whole-industry figure (10.7 times). FOULAD's debt-to-assets ratio is 51.9%, against 56.0% for the whole industry; although it has risen from 46.1% in the previous version, debt's share of assets is still smaller than the whole-industry figure.

Risks: The selling price of hot-rolled products (domestic) in Shahrivar 1405 is below the price the company assumed for the rest of the year (the company's assumption is about 24.1% higher); if this gap persists, the year's revenue falls behind the company's estimate. The gross profit margin of the latest quarter (30.9%) is about 11 percentage points below the 19-year average for this same quarter (41.8%). Hot-rolled products made up 43.5% of domestic and export sales in the first 6 months; so a fall in the price or demand for this product quickly reaches profit. The company estimated the year's cost of goods sold 103.5% above last year, while its estimated revenue growth is 82.3%. If cost rises faster than revenue, the margin comes down.

To follow these variables, after each new report go to the FOULAD monthly reports and the FOULAD financial ratios.

7. Conclusion of the fundamental analysis of FOULAD

The fundamental analysis of FOULAD shows that the company's profitability depends, more than on anything else, on the price and volume of its main products and on their profit margin. Sales in the first 6 months of fiscal year 1405 came in with 64.1% growth over the same period last year.

So sales are ahead, but the gross margin, despite the improvement in the last quarter, still stands below its usual level, and revenue growth alone has not made up for it.

In its forecast published on Codal (letter of 30 Mehr 1405), the company estimated fiscal year 1405 gross profit at 139,714.7 billion tomans; that is, gross profit per share of 722 rials on the basis of 1,935 billion shares, which is 15.4% higher than the version that came with the 3-month report. The estimated gross margin is 20.9%; lower than the previous fiscal year's 29.1% and below the 25-year average of the annual margin. The company's assumed price for hot-rolled products is above the Shahrivar price, and this makes the estimate sensitive to prices.

On valuation, FOULAD trades at a P/E below the whole-industry figure (10.7 times). Past performance does not guarantee the future. Data sources: monthly reports, separate financial statements and the company's forecast on Codal up to 30 Mehr 1405, and trades and financial ratios up to 29 Mehr 1405.

#Iran Mercantile Exchange #Fundamental Analysis #Basic Metals Industry #Mobarakeh Steel #Monthly Activity Report