⚡ Flash Summary

KAPCO’s recent corporate briefing highlights a period of mixed performance and future strategic shifts. The company reported a gross loss of Rs. 438.157 million for 2024-2025 compared to no revenue reported in 2023-2024 in gross loss. Operating profit declined significantly from Rs. 9.319 billion to Rs. 3.243 billion. KAPCO is focusing on diversification, investing approximately Rs. 41 billion in mutual funds and pursuing acquisitions in the cement sector. These strategic moves aim to offset declining power generation revenues and secure future growth.

📌 Key Takeaways

• 🏭 KAPCO’s timeline shows extension of PPA till Oct-22 and generation license extended for 3 years in April 2025.
• 📉 Gross loss of Rs. 438.157 million in 2024-2025 versus no revenue reported for Cost of Sales in 2023-2024.
• ⚠️ Operating Profit declined significantly from Rs. 9.319 billion to Rs. 3.243 billion.
• 💰 Profit for the year decreased from Rs. 4.313 billion to Rs. 2.536 billion.
• 📉 Earning Per Share (Basic & Diluted) decreased from Rs. 4.90 to Rs. 2.88.
• 🤝 Hybrid Take or Pay terms in TPPA include ROE firmed up to 25% load factor.
• 📦 LSFO inventory maintained at 7 days at full load.
• 💸 Total dividend payments since 1996 are Rs. 168 Billion (Rs. 191.04/share).
• 🧾 Total dividend payment since listing in 2005 amounts to Rs. 132 Billion (Rs. 150.35/share).
• 🏢 GT-3 & GT-4 sold for Rs. 800 million with dismantling expected by February 2026.
• 🌱 Investment of approximately Rs. 41 billion in Mutual Funds for diversification.
• cement sector: Joint bid with Fauji Foundation to acquire 84.06% stake in Attock Cement.
• ☀️ Pending NEPRA approval for K-Electric solar projects bids.

🎯 Investment Thesis

Given KAPCO’s declining profitability and the uncertainty surrounding its diversification efforts, a HOLD rating is recommended. The company’s strategic shift into new sectors introduces new risks and potential rewards, making it difficult to predict future performance. A price target of Rs 30 is set based on a conservative earnings multiple, with a time horizon of 12-18 months pending clarity on the success of diversification initiatives.