Kohinoor Power Company Limited’s audited FY2026 result is a split-screen outcome. The rental business improved materially: revenue rose, gross profit more than doubled and operating cash generation strengthened. Yet a Rs7.39 million income-tax charge—mostly a deferred-tax reset—turned a Rs3.92 million profit before income tax into a Rs3.47 million net loss. The operating direction was better; the bottom line was worse.
That distinction matters because KOHP is no longer behaving like a conventional power producer. The company says it was initially engaged in electricity generation, but its current reported revenue comes from leasing property. FY2026 rental income came from one customer, the tenant is a related party, and the company had no employees on payroll at year-end. The result should therefore be read as the performance of a very small, concentrated leasing-and-asset-holding business—not as evidence of a power-generation recovery.
Results at a glance
- Reporting basis: audited standalone financial statements for the year ended June 30, 2026, in Pakistani rupees. The independent auditor issued an unmodified opinion.
- Rental income increased 51.6% to Rs10.22 million from Rs6.74 million.
- Gross profit rose 121.3% to Rs5.48 million; gross margin expanded to 53.64% from 36.75%.
- Operating profit increased 81.9% to Rs5.07 million despite lower other income.
- Profit before income tax increased 45.2% to Rs3.92 million, after a Rs1.15 million levy.
- The income-tax line swung to a Rs7.39 million expense from an Rs8.22 million benefit. KOHP consequently reported a Rs3.47 million loss after tax versus an Rs10.92 million profit.
- Basic EPS was negative Rs0.28, compared with positive Rs0.87. No cash dividend or bonus shares were recommended.
- Net cash from operations increased to Rs8.83 million from Rs3.54 million. Cash and bank balances rose 70.4% to Rs22.49 million, and the company reported no debt.
What improved
The cleanest positive was rental income. Building rent reached Rs10.22 million, up Rs3.48 million year on year. The annual report identifies this entirely as rent from investment property under an operating lease. The company’s six-year summary shows that revenue had fallen to Rs6.74 million in FY2025 from Rs11.12 million in FY2024 and roughly Rs17.6 million in each of FY2022 and FY2023. FY2026 therefore represents a meaningful rebound from last year, although it remains below the earlier rental base.
Direct cost rose only 11.1% to Rs4.74 million while revenue grew 51.6%. This produced the sharp gross-margin expansion. Importantly, nearly all direct cost was non-cash: Rs3.50 million of depreciation on plant and equipment, Rs0.24 million of depreciation on investment property, and a Rs1.00 million impairment loss on plant and equipment. The arithmetic explains the operating leverage without requiring an unsupported story about volumes or pricing. The filing does not disclose the contractual step-up, occupancy change or other commercial split behind the rent increase.
Operating profit also improved despite less support from other income. Other income fell 37.3% to Rs1.73 million because FY2025 included a Rs1.25 million liability write-back that did not recur. FY2026 instead included Rs1.21 million of return on bank deposits, Rs0.46 million of gains on disposal of short-term investments, Rs0.06 million of fair-value gains and a small dividend. Administrative expense increased only 3.9% to Rs2.02 million, while other expenses fell to Rs0.13 million from Rs0.51 million. As a result, operating profit rose to Rs5.07 million from Rs2.79 million.
Cash generation was stronger than reported net income. Cash generated before tax payments reached Rs11.13 million, and net operating cash was Rs8.83 million after income taxes and levies. The bridge included depreciation and impairment, while working capital contributed Rs1.67 million. This is a useful counterweight to the accounting loss: FY2026 did not consume cash at the operating level.
What weakened / needs attention
The decisive negative was taxation. KOHP reported a Rs7.39 million income-tax expense, comprising a Rs7.92 million deferred-tax charge partly offset by a Rs0.53 million current-tax credit. The deferred-tax charge included Rs4.29 million from temporary differences and Rs3.62 million from changed tax rates. The net deferred-tax asset fell to Rs0.90 million from Rs8.81 million. Management attributed the annual loss mainly to the treatment of carried-forward tax losses and the deferred-tax asset.
This creates an unusually large gap between operating progress and statutory earnings. Before the income-tax line, profit was Rs3.92 million, up from Rs2.70 million. After tax, KOHP lost Rs3.47 million. The FY2025 comparison was distorted in the opposite direction: that year’s Rs8.22 million tax benefit lifted a modest pretax profit into Rs10.92 million of net income. Neither year’s PAT is a clean proxy for recurring operating power. Investors should separately track rental profit, cash generation and changes in deferred tax.
Customer and counterparty concentration are more structural concerns. All FY2026 rental income came from one customer. The property was leased to a related party, and Rs15.02 million of lease rentals receivable were substantially due from a single related-party customer. The entire balance was shown as past due by 181 days or more. Management classified it as performing, recorded no loss allowance and expected full recovery because of the relationship, but the company held no collateral. That combination—single-customer dependence, related-party exposure and a very old receivable—deserves more attention than the headline current ratio suggests.
The business footprint is also exceptionally narrow. The annual report states that the company had no employees on payroll. Machinery carried a net book value of Rs65.50 million after Rs3.50 million depreciation and Rs1.00 million impairment, but no machinery was leased to a related party at June 2026, compared with Rs70.00 million leased a year earlier. Current revenue was building rent, not power sales. The company still holds legacy plant, yet the reported economics now depend on a small property lease and financial income.
Balance sheet and cash flow
Liquidity is ample on the face of the audited balance sheet. Current assets were Rs53.98 million against current liabilities of Rs4.24 million, a 12.72 times current ratio. Cash and bank balances of Rs22.49 million alone covered total current liabilities more than five times. The company had no debt and finance cost was only Rs3,816. Equity stood at Rs118.64 million, down 2.8% because the net loss flowed directly into accumulated losses.
The composition of liquidity is less pristine than the headline suggests. Alongside cash, current assets included the Rs15.02 million aged lease receivable, Rs8.41 million of advance income tax or refundable tax, Rs6.71 million of advances and other receivables, and Rs0.59 million of listed equity investments. Current liabilities nearly doubled because trade and other payables rose to Rs3.65 million, including Rs1.99 million of customer advances and Rs0.77 million of levies payable. There is no near-term solvency pressure in the disclosed numbers, but cash, tax balances and related-party receivables should not be treated as interchangeable.
Future contracted rent provides some visibility. Minimum lease payments disclosed under operating leases were Rs26.08 million, comprising Rs10.64 million due within one year and Rs15.44 million due between one and five years. That was almost double the Rs13.66 million disclosed a year earlier. This supports the continuity of rental income, although the filing does not provide enough contract detail to infer an exact FY2027 revenue number.
A six-year view: recovery, not reinvention
KOHP’s six-year table shows the current improvement in perspective. Revenue was Rs17.11 million in FY2021, Rs17.45 million in FY2022 and Rs17.55 million in FY2023, then fell to Rs11.12 million in FY2024 and Rs6.74 million in FY2025 before recovering to Rs10.22 million. Gross margin moved from 13.29% in FY2021 to 53.64% in FY2026, helped by the lower-cost rental base. But profitability has been volatile: losses were reported in FY2021 through FY2024, FY2025 recorded a tax-assisted profit, and FY2026 returned to a tax-driven loss.
The longer history argues against extrapolating one year’s net income. The more durable positives are the debt-free balance sheet, larger cash position, improved rental receipts and the higher disclosed minimum lease payments. The more durable risks are business concentration, related-party dependence, the aging receivable, idle or non-revenue-generating plant and the absence of a broader operating platform.
AlphaGen model readout
These are AlphaGen model scores, not figures reported by the company and not investment recommendations:
- Alpha QoQ Score: 20.49
- TTM Performance Score: 55.09
- 3Y Business Perf Score: 75.49
- Sector Leadership Score: 38.3492
The score mix is consistent with the financial picture: weak latest-quarter momentum, a middling trailing profile, a stronger three-year direction from the depressed FY2024 base, and below-average sector leadership. Because KOHP now reports rental rather than power-generation revenue, sector-relative interpretation should be cautious.
What to monitor next
- Rental collections: whether the Rs15.02 million receivable, all shown as more than 181 days past due, converts to cash.
- Lease execution: whether the disclosed Rs10.64 million of payments due within one year is billed and collected on schedule.
- Tax normalization: whether further changes in deferred-tax assumptions materially distort PAT after the FY2025 benefit and FY2026 charge.
- Asset utilization: whether the Rs65.50 million net machinery base produces rental or operating revenue, or requires more impairment.
- Revenue concentration: whether KOHP adds customers or remains dependent on one related-party tenant.
- Cash discipline: whether the Rs22.49 million balance is preserved or deployed into productive, transparent uses.
- Listing status: PSX currently displays a Risk Warning Alert for KOHP; future compliance announcements should be monitored directly on the exchange page.
Evidence and limitations
The October 5 financial-result notice and the October 6 audited annual report agree on the FY2026 core figures, so the later audited filing is used as the controlling source. The analysis uses standalone annual accounts. The report does not disclose the commercial breakdown behind the rental increase, such as a rate reset or changed leased area, and it provides no operating power-volume data because current revenue is rental income. No such causes have been inferred.
Primary sources
PSX — KOHP FY2026 audited annual report (October 6, 2026)
PSX — KOHP financial results for the year ended June 30, 2026 (October 5, 2026)