⚡ Flash Summary

Lalpir Power Limited (LPL) reported a significant after-tax loss of PKR 829.583 million for the quarter ended September 30, 2025, a stark contrast to the profit of PKR 4,734.916 million in the same period last year. This decline is primarily attributed to the termination of the Power Purchase Agreement (PPA) and subsequent cost reduction measures undertaken by the company, including voluntary severance schemes. Despite the loss, LPL maintains a strong financial position with substantial investments in mutual funds and savings accounts, totaling PKR 11,286 million as of September 30, 2025. The company is exploring new avenues for income generation, including participation in the Competitive Trading Bilateral Contracts Market (CTBCM).

📌 Key Takeaways

• 📉 After-tax loss of PKR 829.583 million for Q3 2025, a major drop from last year.
• ❌ Loss per share of PKR 2.18 compared to earnings per share of PKR 12.47 last year.
• ⚡ Revenue significantly decreased due to the PPA termination.
• 💰 Company holds PKR 11,286 million in investments and saving accounts.
• 💪 Financial position considered sound despite the PPA termination.
• 🤝 Exploring CTBCM for future electricity sales.
• 💼 Buy-back of up to 100 million ordinary shares proposed to enhance book value.
• 🗓️ Buy-back period from November 27, 2025, to May 15, 2026.
• ✂️ Cost reduction measures implemented, including VSS.
• 🏭 Power plant maintained in preservation mode.
• 💡 Seeking new income opportunities and business ventures.
• 🔒 No remuneration to non-executive directors except meeting fees.
• 💧 Legal dispute over canal water rates ongoing.

🎯 Investment Thesis

Given the significant financial losses, uncertainty about future revenue streams, I recommend a SELL rating. The loss of the PPA creates substantial questions about the company’s ability to generate consistent profits. A price target cannot be reasonably estimated at this time due to the lack of revenue visibility. The time horizon is medium to long-term, as the company needs time to secure new revenue streams and demonstrate sustainable profitability.