· AKD Research revises its target price to PkR116/sh, implying an upside of 73% from last close and a D/Y of 13%. In the budget FY23, the Govt. has announced that the tax exemption for IPPs is going to have a maximum limit of 25 years, which has been duly incorporated in our model.

· Our revised projections also incorporate a RFR of 15.5%, along with PkR/US$ parity of 198/210 for FY23/FY24. Moreover, Crude oil is expected at US$95/bbl in FY23 and US$90/bbl for FY24, while the long-term average for Crude oil is expected at US$70/bbl.

· In FY22, HUBC has seen a surge in its utilization for the Base and Narowal plants. Utilization factor for 11MFY22 for base plant hovers at ~11%, while utilization for Narowal plant is ~46%

· We expect the company to post EPS of PkR27.0 in FY23, driven by the commencing of operations for the TEL and TNPTL plants which are expecting to launch in 1QFY23 and 2QFY23 respectively. Furthermore, we expect a cumulative payout of PkR8.5/sh .

Courtesy – AKD Research