Nishat Power Limited (NPL) announced its 1QFY24 financial result today where the company posted a profit after tax (PAT) of PKR 1,457mn (EPS: PKR 4.12), up by 55% YoY compared to PKR 943mn (EPS: PKR 2.66) in the same period last year.

Result Highlights

During 1QFY24, net sales witnessed a decrease of 14% YoY to clock in at PKR 9,788mn. The decline in sales is on the back of a decline in dispatches (-22% YoY to 231GWh, Load factor: 54%). This decline in dispatches is attributed to an overall drop in electricity demand for FO-based power generation due to the induction of relatively cheaper power plants. The FO-based generation of the country has witnessed a decline of 60% YoY during 1QFY24.

On a QoQ basis sales increased by 66% due to a 36% rise in dispatches.

During 1QFY24, the gross margins of the company clocked in at 14%.

Despite higher interest rates, finance costs decreased by 94% YoY | 68% QoQ to arrive at PKR 2mn during 1QFY24. The decline is mainly attributable to a reduction in short-term borrowings.

Recommendation

We have a HOLD call on the scrip with a Jun’24 target price of PKR 23.3/share.

Courtesy- AHL Research