Nishat Power Limited (NPL) Q3 Earnings Preview
AKD Research has just released an update on Nishat Power Limited’s previous quarter’s financial results. Here are the important points from their Q3 earnings preview.
Strong Earnings Growth Expected
Nishat Power Limited (NPL) is anticipated to report a Net Profit After Tax (NPAT) of PkR1.13 billion, translating to earnings per share (EPS) of PkR3.20 for the third quarter of FY24. This reflects a significant increase of 32% quarter-on-quarter (QoQ) and an impressive 36% year-on-year (YoY) growth.
Factors Driving Earnings Growth
The expected rise in earnings is primarily attributed to improved gross margins, stemming from cost-saving measures and increased earnings from non-operating income. The assumed generational efficiency of 42% and strategic investments in short-term investments have contributed to enhanced profitability.
Operational Performance
The plants’ utilization factor stood at 21% during the quarter, a notable increase compared to 6% in the previous quarter and 14% in the same period last year. This surge in utilization was mainly driven by heightened generation from Residual Fuel Oil (RFO) sources, compensating for reduced availability of Hydel power during the late winter season.
Investment Recommendation
Given the positive outlook, AKD Research maintains a ‘Buy’ recommendation on NPL. They have set a Dec’24 Target Price of PkR40 per share, indicating a potential upside of 25% over the last close. Additionally, the estimated dividend yields for FY24 and FY25 are projected at 19% and 22% respectively, culminating in a total return of over 40% over these periods.
Conclusion
Overall, the anticipated quarterly results suggest a strong performance by Nishat Power Limited, driven by improved margins and operational efficiency. Investors are encouraged to keep an eye on NPL as it continues to deliver robust earnings growth and attractive dividend yields.
| Financial Metric | 3QFY24E (PKRmn) | 2QFY24A (PKRmn) | QoQ (%) | 3QFY23A (PKRmn) | YoY (%) | 9MFY24E (PKRmn) | 9MFY23A (PKRmn) | YoY (%) |
|---|---|---|---|---|---|---|---|---|
| Net Sales | 4,401 | 2,433 | 81% | 3,469 | 27% | 16,622 | 17,159 | -3% |
| Gross Profit | 68 | 102 | -33% | 63 | 9% | 3,388 | 3,267 | 4% |
| Opex | 133 | 109 | 22% | 154 | -14% | 349 | 408 | -14% |
| Finance Cost | 186 | 8 | 2112% | 23 | 699% | 196 | 83 | 136% |
| Other Income | 290 | 213 | 36% | 49 | 494% | 672 | 100 | 575% |
| PAT | 1,133 | 858 | 32% | 831 | 36% | 3,448 | 2,875 | 20% |
| EPS | 3.20 | 2.42 | 32% | 2.35 | 36% | 9.74 | 8.12 | 20% |
| DPS | – | 2.50 | – | – | 2.50 | 4.00 | – |
Disclaimer:
The information in this article is based on research by AKD Research. All efforts have been made to ensure the data represented in this article is as per the research report. This report should not be considered investment advice. Readers are encouraged to consult a qualified financial advisor before making any investment decisions.
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