AHL Research Ltd reported that Pakistan’s power sector posted a 14% year-on-year increase in earnings to PKR 54.6bn in FY26, as associate income and lower finance costs offset weaker core profitability.

Sector sales grew 10.1% YoY to PKR 101bn, supported by higher utilization and improved tariff pricing across KSE-100 IPPs. KAPCO’s entry into a three-year tripartite PPA with CPPA-G and NGPCL helped cushion the impact of HUBC’s base plant PPA termination effective October 1, 2025.

Power generation rose 1.2% YoY to 128,699 GWh, broadly stable for the fourth consecutive year and below the FY22 peak of 145,094 GWh, reflecting persistent demand weakness. Utilization improved across several plants: NEL to 8.6% (2.0% in FY25), CPHGC to 11.2% (6.4%), TEL to 68.8% (60.6%), TNPTL to 69.4% (67.7%), LEL to 48.8% (48.3%), and NPL to 11.3% (5.0%).

Associate profits rose 13.7% YoY to PKR 46.9bn, driven by diversification. NPL’s auto sector entry contributed PKR 1.3bn, HUBC’s associate profit grew 10% including PKR 159mn from BYD, while KAPCO diversified into cement.

Finance costs fell 38.3% YoY to PKR 9.6bn, reflecting lower interest rates and repayments of CPEC-related loans.