Verdict: Nishat Power Limited returned to profit in FY2026, but the quality of the recovery is mixed. Higher dispatch more than doubled electricity delivered and lifted revenue 56%, yet lower delayed-payment markup and a much heavier fuel bill compressed gross profit. The swing from loss to profit also reflects two large items outside the core power-generation margin: the absence of FY2025’s PKR 3.85 billion CPPA-G adjustment and a new PKR 1.30 billion share of profit from Nexgen Auto.
The audited company financial statements for the year ended June 30, 2026 carry an unmodified audit opinion. Figures below are in Pakistani rupees and refer to Nishat Power Limited’s own accounts; Nexgen Auto is included through the equity method rather than line-by-line consolidation.
Results at a glance
- Revenue: PKR 11.02 billion, up 56.1% from PKR 7.06 billion.
- Gross profit: PKR 1.38 billion, down 48.2%; gross margin fell to 12.5% from 37.7%.
- Operating profit: PKR 1.81 billion, down 48.7% from PKR 3.52 billion.
- Profit after tax: PKR 2.48 billion versus a PKR 746.8 million loss; EPS was PKR 7.01 versus a PKR 2.11 loss per share.
- Electricity delivered: 193.2 GWh versus 86.7 GWh; average capacity factor improved to 11.29% from 5.07%.
- Operating cash flow: negative PKR 4.95 billion versus positive PKR 12.34 billion.
- Final dividend proposed: PKR 1.00 per share, in addition to PKR 1.50 per share paid during the year.
AlphaGen model scores
These are AlphaGen model outputs, not figures reported by Nishat Power: Alpha QoQ Score 40.45; TTM Performance Score 53.49; 3Y Business Perf Score 23.35; Sector Leadership Score 47.80.
What improved
Dispatch and energy revenue recovered
The clearest operating improvement was utilization. Actual energy delivered rose 123% to 193.2 GWh, while the annual average capacity factor increased to 11.29% from 5.07%. Management attributes the higher dispatch to disruptions in RLNG supply that constrained some gas-fired plants and increased the system’s need for furnace-oil generation. That explanation is company-reported, but the arithmetic is visible in both output and revenue.
Energy purchase price revenue rose to PKR 8.47 billion from PKR 2.80 billion, an increase of about 202%. That more than offset a 23% decline in capacity purchase price revenue to PKR 2.44 billion. The mix therefore shifted decisively toward generation-linked revenue rather than fixed capacity revenue.
The plant continues to operate under the Hybrid Take-and-Pay structure that became effective on November 1, 2024. This matters because the revenue profile now depends more directly on dispatch and because the revised delayed-payment mechanism materially reduced delayed-payment markup.
The bottom line moved back into profit
Reported profit before levy and tax was PKR 3.04 billion, compared with a PKR 375.7 million loss. After levy and tax, profit was PKR 2.48 billion. The improvement is real in the reported accounts, but it should not be read as a simple recovery in power-generation profitability.
FY2025 included a PKR 3.85 billion charge linked to the revised CPPA-G arrangement: PKR 1.37 billion of delayed-payment markup written off and PKR 2.48 billion of prior-year fuel and O&M earnings shared. That charge did not recur in FY2026. Conversely, FY2026 gained PKR 1.30 billion from the company’s 33.33% associate interest in Nexgen Auto. Before these two period-specific items, profit after finance cost was PKR 1.74 billion in FY2026 versus PKR 3.47 billion in FY2025—a roughly 50% decline. This is the most useful bridge between the headline turnaround and the weaker underlying power economics.
Investment gains remained substantial
Other income was broadly stable at PKR 1.45 billion, but almost all of it came from PKR 1.41 billion of realized gains on mutual-fund investments. Deposit and term-deposit income fell sharply. This makes treasury gains an important contributor to reported operating profit, though not a recurring measure of plant performance.
What weakened / needs attention
Margins contracted despite higher generation
Cost of sales more than doubled to PKR 9.64 billion from PKR 4.40 billion. Raw materials—principally fuel—rose to PKR 7.83 billion from PKR 2.56 billion. Revenue increased strongly, but the incremental fuel cost and the collapse in delayed-payment markup overwhelmed the benefit at gross-profit level.
Delayed-payment markup fell 89.9% to PKR 108.6 million from PKR 1.07 billion. Management links this to the amended payment mechanism and to settlement of overdue receivables in the second half of FY2025. Gross profit consequently fell by PKR 1.28 billion, and gross margin contracted by 25.2 percentage points.
Administrative expenses rose 17% to PKR 637.2 million, including higher legal and professional costs. Other expenses climbed to PKR 386.6 million, largely because of a PKR 333.2 million loss recognized when the Rafhan Maize investment was initially measured at fair value through other comprehensive income. Finance cost rose to PKR 70.0 million from PKR 43.4 million, still modest relative to profit but moving in the wrong direction as borrowings increased.
Profit did not convert into cash
Operating cash flow swung to a PKR 4.95 billion outflow from a PKR 12.34 billion inflow. The working-capital drain was PKR 5.94 billion: trade receivables increased by PKR 4.88 billion, inventories by PKR 803.7 million, and other current receivables by PKR 316.3 million.
Trade debts owed by CPPA-G reached PKR 6.54 billion from PKR 1.66 billion, with PKR 5.43 billion overdue at year-end. The receivables are backed by a Government of Pakistan guarantee and carry delayed-payment markup when overdue, but timing risk remains economically important. The FY2026 cash-flow statement demonstrates that accounting profit and cash realization can diverge sharply.
Liquidity shifted toward borrowing
Short-term investments fell to PKR 3.18 billion from PKR 18.11 billion as funds were redeployed, while short-term borrowings increased to PKR 4.91 billion from PKR 719.9 million. Cash was only PKR 137.7 million. Net borrowings rose to PKR 4.77 billion and the company’s reported gearing ratio increased to 15.96% from 2.17%.
The balance sheet is not highly leveraged relative to PKR 29.90 billion of equity, but liquidity is now more dependent on timely CPPA-G collections and on the value and monetization of investments. A one-percentage-point change in rates would have changed annual pre-tax profit by about PKR 47.9 million, based on the company’s sensitivity analysis.
Portfolio diversification: opportunity and new risk
Nishat Power invested approximately PKR 13.0 billion for a 14.36% holding in Rafhan Maize Products, carried at PKR 12.63 billion at year-end after the initial fair-value adjustment. It also carried PKR 3.30 billion of equity-accounted associate investments, principally the 33.33% holding in Nexgen Auto.
Nexgen’s PKR 1.30 billion profit contribution was material: it represented about 43% of Nishat Power’s profit before levy and tax. That provides a new earnings stream and partly reduces reliance on plant dispatch, but it also changes the company’s risk profile. Investors now need to assess an auto associate and a large listed food-ingredients investment alongside the legacy power asset.
The Rafhan stake may provide dividends and capital appreciation, but it also concentrates a large amount of capital in one equity holding. The annual report’s sensitivity analysis indicates that a 5% movement in the relevant equity index would affect other comprehensive income by about PKR 631 million, assuming the investment moved with the index.
Historical context
FY2026 revenue recovered from the FY2025 trough but remained well below the roughly PKR 22.5–23.7 billion recorded in FY2022–FY2024. Profit after tax of PKR 2.48 billion was also below the PKR 4.09 billion earned in FY2023 and PKR 5.39 billion in FY2024. The latest result therefore looks more like a partial operating recovery combined with a new investment-income layer than a return to the prior earnings peak.
The plant’s low utilization remains structural context. Even after more than doubling output, the 11.29% capacity factor means most theoretical capacity was unused. The PPA provides contractual protection, but the Hybrid Take-and-Pay amendment increases the importance of dispatch, fuel availability, and the system’s merit order.
Dividend
The board proposed a final cash dividend of PKR 1.00 per share, on top of the PKR 1.50 interim dividend paid during FY2026. Total FY2026 cash distributions therefore amount to PKR 2.50 per share if the final dividend is approved. That is below EPS of PKR 7.01, which is prudent given negative operating cash flow, higher receivables, and expanded investment commitments.
What to monitor next
- CPPA-G collections: whether the PKR 6.54 billion receivable balance converts to cash and overdue balances decline.
- Dispatch and capacity factor: whether FY2026’s RFO dispatch uplift persists once RLNG constraints normalize.
- Margin mix: energy purchase revenue, capacity revenue, and delayed-payment markup under the amended PPA.
- Nexgen Auto: whether the PKR 1.30 billion associate profit is repeatable and begins to generate dividends.
- Rafhan Maize: dividends, fair-value movements, and whether the large capital allocation earns an adequate cash return.
- Borrowings and liquidity: whether short-term debt falls as receivables are collected.
Bottom line
Nishat Power’s FY2026 result is better than the headline loss-to-profit comparison alone suggests in one respect—dispatch genuinely recovered—but weaker than it suggests in another. Core gross and operating profitability declined, cash conversion was poor, and a large associate contribution helped carry the bottom line. The next result needs to show collection of receivables and healthier power margins, not merely another accounting profit supported by investments.
Primary sources
Nishat Power Limited, audited Annual Report 2026: official PSX filing
Pakistan Stock Exchange company page, including FY2026 result announcement and reported financial summary: NPL company page
Nishat Power investor-relations archive: financial statements and annual reports
NEPRA tariff indexation for Nishat Power, Jan–Mar 2026: official tariff decision
Method note: percentage changes and margins are calculated from the audited annual figures. The article does not use share-price data, technical indicators, valuation multiples, or non-approved private model fields.