Nishat Chunian Power Limited (NCPL) announced its 1QFY23 financial result today, where the company posted a profit after tax (PAT) of PKR 960mn (EPS: PKR 2.61), up by 57% YoY compared to PKR 612mn (EPS: PKR 1.67) in the same period last year.

After the announcement, the share price of script fell as markets were expecting some cash dividends.

Result Highlights

· During 1QFY23, net sales increased 54% YoY to clock in at PKR 8,587mn. The rise in sales was owed to higher FO prices. However, dispatches declined by 23% YoY to 210GWh (Load factor: 49%). The overall country power generation decreased by 10% YoY during 1QFY23 as FO-based generation went down by 30%.

· During 1QFY23, the company’s gross margins remained at 15%.

· Finance cost decreased by 9% YoY to PKR 190mn. Despite higher interest rates compared to the same period last year, finance costs declined, mainly due to lower short-term borrowings.

Recommendation

We have a BUY call on the scrip with a Jun ’23 target price of PKR 19.08/share.

Courtesy- AHL Research