⚡ Flash Summary

Power Holding Limited’s (PESC1) audited financial statements for the year ended June 30, 2025, reveal a mixed financial landscape. While the company reported a significant increase in net profit after taxation, from PKR 187.44 million in 2024 to PKR 291.37 million in 2025, this growth appears heavily reliant on a substantial reversal of funds utilized for finance costs. An independent auditor’s report expresses an unqualified opinion on the financial statements but raises concerns about material misstatements or inconsistencies in other information provided by management, and this also suggests heightened financial and regulatory scrutiny. It functions as a not for profit entity.

📌 Key Takeaways

• ⬆️ Net profit after tax increased significantly by 55.4% from PKR 187.44 million in 2024 to PKR 291.37 million in 2025.
• ➡️ Earnings per share (EPS) also rose substantially from PKR 124.96 in 2024 to PKR 194.25 in 2025.
• ⚠️ The company’s reliance on “Grant – from power sector, GOP” is critical to its financial performance.
• ⚠️ Finance cost decreased by less than 1%. This could be attributed to a possible new project.
• 🤔 Non-current assets decreased, however details for what was lost would be found in the notes.
• 💰 Cash and bank balances significantly decreased from PKR 356.03 million to PKR 94.98 million, indicating potential liquidity concerns.
• 🏢 Total assets decreased from PKR 812.48 million to PKR 773.43 million.
• 📉 Accumulated profit increased from PKR 540.34 million to PKR 831.71 million.
• ❗ Long term financing decreased by more than 100 Million.
• 👍 Auditor’s report expresses an unqualified opinion on the financial statements.
• 📑 Notes to the financial statements reveal complex financial arrangements, government involvement, and circular debt dynamics.
• ⚡ Significant portion of long term financing was due to be paid this year. Will need to monitor in the next reporting year.
• 🔍 Deferred tax asset increased slightly from PKR 235,345 to PKR 255,723.
• 📊 Debt/Equity is zero, since the company is almost completely financed by others.

🎯 Investment Thesis

HOLD. PESC1’s financial stability depends heavily on the government’s continued support. Given limited independent revenue generation and complex financial arrangements, it is not recommended to BUY or SELL the stock at this time. I recommend a HOLD due to the high level of involvement from the Pakistani government.