• Recent developments are sparking renewed interest in KAPCO, NPL, and NCPL, which have long been overlooked despite attractive valuations, robust cash positions, debt-free balance sheets, and appealing dividend yields. While market caution had persisted due to power tariff adjustments and conservative dividend expectations, these strategic moves are beginning to change the narrative, according to a report by AHL Research.
• NPL and NCPL are venturing into the auto sector, while KAPCO is eyeing ACPL in the cement industry, initiatives that have already fueled market gains.
• Since announcing their entry into the auto segment, NPL and NCPL have surged in the market, delivering returns of 54% and 80%, respectively. In comparison, KAPCO has gained 21% following its announcement of interest in acquiring ACPL.
• To recall, power sector reforms and improved cash positions have further strengthened these companies’ balance sheets. NPL and NCPL recovered overdue receivables of PKR 9.6bn and PKR 6.7bn, respectively, enabling a smooth transition into the auto sector, which we view positively.
• KAPCO, meanwhile, has had its PPA reinstated for three years after 12 consecutive quarters of gross losses. It has also collected the majority of its trade receivables, reducing them from PKR 37.8bn in Dec’22 to PKR 8.6bn in Sep’25, while clearing all short-term debt, which has fallen from PKR 31.1bn to fully repaid. Despite these repayments, the company still retains substantial cash of PKR 39.7bn (PKR 45.1/shr), providing ample room to fund new projects and growth initiatives.

Courtesy – AHL Research