⚡ Flash Summary

Nishat Chunian Power Limited (NCPL) reported a significant decline in its financial performance for the quarter ended September 30, 2025. Turnover decreased to PKR 1,366 million from PKR 2,077 million in the same period last year (SPLY), and profit after tax plummeted to PKR 552 million from PKR 1,466 million SPLY. This resulted in a lower Earnings Per Share (EPS) of PKR 1.50 compared to PKR 3.99 SPLY. The reduction in capacity tariff and delayed payments due to the Amendment Agreement (AA) negatively impacted turnover and profit. The company dispatched more power this quarter, but faces headwinds from rising furnace oil prices and reduced tariffs.

📌 Key Takeaways

• 📉 Revenue declined to PKR 1,366 million, a significant drop from PKR 2,077 million SPLY.
• Profit after tax sharply decreased to PKR 552 million from PKR 1,466 million SPLY.
• 💸 Earnings Per Share (EPS) fell to PKR 1.50 from PKR 3.99 SPLY.
• 🚫 The reduction in capacity tariff impacted financial results.
• ⏱️ Delayed payments under the Amendment Agreement (AA) further strained financials.
• 🏭 The company dispatched 17,857 MWH of power, up from 8,054 MWH SPLY.
• ⚙️ Plant capacity factor improved to 4.13% from 1.86% SPLY.
• ✅ Plant availability factor remained high at 99.57% (99.89% SPLY).
• ⚠️ Rising furnace oil prices and reduced tariffs pose challenges.
• ⚡ Strategic investment made in NexGen, an Electric Vehicle (EV) manufacturer, to diversify portfolio.
• 💰 Receivables from the Power Purchaser stood at PKR 1,359 million.
• overdue receivables amount to PKR 1,013 million.
• 📈 Other income increased to PKR 290.884 million from 239.144 million SPLY.
• 🏦 Cash and cash equivalents sharply decreased to (960,919) from 175,721 thousand SPLY.

🎯 Investment Thesis

I recommend a SELL rating for NCPL. The company’s financial performance is declining due to adverse regulatory changes and increasing operational costs. While the strategic investment in the EV sector might offer long-term potential, the near-term outlook remains challenging. The current headwinds outweigh any potential upside, warranting a cautious approach. The Price target of PKR 15.0 based on a 10x multiple of expected forward earnings. The time horizon is SHORT_TERM