Nishat Power Limited

RATING REPORT | Sep-26

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Rating History
Dissemination Date Long-Term Rating Short-Term Rating Outlook Action Rating Watch
18-Sep-26 AA- A1 Stable Maintain -
19-Sep-25 AA- A1 Stable Maintain -
20-Sep-24 AA- A1 Stable Maintain -
22-Sep-23 AA- A1 Stable Maintain -
24-Sep-22 AA- A1 Stable Maintain -
About the Entity

Nishat Power Limited was incorporated in Pakistan on 23 February 2007 as a public limited company and commenced commercial operations in June 2010. The Company is a 51%-owned subsidiary of Nishat Mills Limited, the flagship of the Nishat Group, and is listed on the Pakistan Stock Exchange. It owns and operates a 200 MW (gross) / 195.305 MW (net) combined-cycle RFO power plant at Jamber Kalan, District Kasur, Punjab, on a BOO basis, selling electricity to CPPA-G under a 25-year PPA. The Board of Directors comprises seven members, with five representing the Nishat Group and two independent directors. The management team is led by Mr. Ghazanfar Hussain Mirza, CEO, supported by qualified professionals across key functions.

Rating Rationale

The ratings reflect the strong business profile of Nishat Power Limited ("NPL" or "the Company"), supported by a long-term Power Purchase Agreement (PPA) with Central Power Purchasing Agency (CPPA-G) valid until 2035. The PPA provides demand risk coverage, while in-house Operations and Maintenance (O&M) gives the Company the advantage of a well-experienced team. Fuel supply risk is considered low, as the Company procures from multiple suppliers on favorable credit terms. Effective 1 November 2024, the Company executed a PPA Amendment Agreement shifting the capacity/ROE tariff component to a 'Hybrid Take-and-Pay' model. The settlement cleared the Company's longstanding receivables, which stood at PKR 2,504 million as at 9MFY26. During 9MFY26, Nishat Power dispatched 87,852 MWh of electricity to CPPA-G (9MFY25: 51,408 MWh), reflecting a recovery in offtake following the Amendment's effective date. The plant operated at an average capacity factor of 6.84% (9MFY25: 4.00%) with an availability factor of 98.20% (9MFY25: 98.39%), confirming that the plant itself has not been the constraint on generation. The Company recorded revenue of PKR 5,147 million for 9MFY26 (9MFY25: PKR 5,216 million) and a net profit after tax of PKR 1,659 million (9MFY25: net loss of PKR 2,113 million). The equity base of the Company remains strong. Following the retirement of project debt in June 2020, the Company's sole remaining obligation comprises short-term borrowings. Liquidity is around PKR 19.7 billion, reflecting the deployment of surplus cash into mutual funds and other investment vehicles. NPL has also participated, alongside other Nishat Group companies, in a consortium pursuing a strategic stake in Rafhan Maize Products Company Limited, holding a modest share of the Nishat Consortium's equity contribution. Most recently, NPL's board approved joining a seven-company consortium to pursue the privatization of Faisalabad Electric Supply Company (FESCO). These diversification initiatives reduce the Company's long-term reliance on a single-buyer power market.

Key Rating Drivers

Sustained financial discipline, coupled with operational performance in line with agreed benchmarks, remains essential. Concurrently, the impact of the revised tariff structure on the Company's financial profile, alongside the evolving dynamics of the power sector, will remain key rating considerations. The successful materialization of the Company's diversification ventures, including its stakes in Nexgen Auto and the Rafhan Maize consortium, and its prospective participation in the FESCO privatization, together with the returns they ultimately generate, will also be monitored as a key rating driver.

REPORT CONTENTS
  1. Rating Analysis
  2. Financial Summary
  3. Rating Scale
  4. Regulatory Disclosure

Nishat Power Limited


Rating Analysis

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Profile
Plant

Nishat Power Limited ("Nishat" or "the Company") operates a 200MW power plant in Jamber Kalan, Kasur, Punjab, on a "Build Own Operate (BOO)" basis. The plant is designed to run on Residual Fuel Oil (RFO). The plant employs a combined cycle reciprocating engine single-fuel RFO red technology. The plant configuration comprises a steam turbine (13.979MW) and eleven (11) Wartsila 18V46 (186.021MW), medium-speed (500rpm), 4-stroke engines, with each having a gross capacity of 16.911MW. While using RFO as the primary fuel, the plant uses light fuel oil (LFO) for start-up. Net rated capacity, after accounting for auxiliary consumption, is 195.305MW. The plant sells electricity to CPPA-G, the power purchaser. The total cost of the project was US$229mln - comprising 80% debt and 20% equity.


Tariff

Nishat Power has a generation tariff (levelized tariff for years 1-25) of US C15.4127 (PKR 13.16) per kilowatt hour (kWh) approved by NEPRA. However, after the continuous indexation and escalation in fuel prices, the Company is receiving the tariff for the fuel cost component of PKR 45.6762/kWh for August, with a capacity charge of PKR 1.8426/kWh, and a variable O&M charge of PKR 3.2100/kWh for 1QFY27.


Return on Project

Pursuant to the Master Agreement, the Power Purchaser and the Company developed and submitted to NEPRA a tariff adjustment application to prospectively reduce ROE and ROEDC components, i.e., 17% per annum in PKR on NEPRA-approved equity at the Commercial Operations Date for ROE and ROEDC calculated at the USD/PKR exchange rate of PKR 168/USD, with no future USD indexation.


Ownership
Ownership Structure

Nishat Power is a subsidiary of Nishat Mills Limited, which holds a 51% stake in the Company. The Company's ordinary shares are listed on the Pakistan Stock Exchange (PSX). Shareholding is diversified, with around 9% held by banks and financial institutions, 36% by the general public, and the balance by other parties.


Stability

Stability for IPPs stems from the long-term agreements signed with the power purchaser. Additionally, the Company benefits from the sponsors' association with the Nishat Group, which provides further comfort.



Business Acumen

Nishat Mills, established in 1951, is the largest textile composite unit in Pakistan and a leading exporter with integrated facilities spanning spinning, weaving, dyeing, printing, finishing, and stitching. Rated "AA" by PACRA, Nishat Mills is the flagship of the Nishat Group, a diversified conglomerate with strong financial strength and interests across textiles, cement, energy, and financial sectors.


Financial Strength

Association with the financially strong and diversified Nishat Group provides significant support and comfort to NPL's financial profile.


Governance
Board Structure

The Board of Directors comprises seven members, including the CEO and two independent directors. Five members represent the Nishat Group, while the independent directors enhance governance. The Board is chaired by Mr. Hassan Mansha. Other members include Mr. Ghazanfar Hussain Mirza (CEO), Mr. Humayun Maqbool, Ms. Maleeha Humayun Bangash, Mr. Mahmood Akhtar, Mr. Shahzad Ahmad Malik, and Mr. Muhammad Aqib Zulfiqar.


Members’ Profile

NPL's Board comprises a qualified and experienced team of professionals from the Nishat Group and independent backgrounds. Collectively, the members bring expertise in finance, energy, corporate management, and business operations, enabling them to provide effective strategic guidance to management. The Board plays a key role in ensuring a strong governance framework and internal controls, thereby supporting the Company's long-term sustainability


Board Effectiveness

For effective oversight of the matters, the board has formed two board committees. (i) Audit Committee (ii) HR & Remuneration Committee to ensure smooth and effective monitoring of operations.


Financial Transparency

Riaz Ahmed & Co. are the external auditors of the Company, and they have given an unqualified opinion on the financials for FY25, with the FY26 audit in progress.


Management
Organizational Structure

Nishat Power has a well-defined and lean organizational structure, supported by a professional management team that oversees operations and ensures the implementation of effective control mechanisms. The structure facilitates efficiency, accountability, and smooth coordination across functions.


Management Team

The Company is led by Mr. Ghazanfar Hussain Mirza, Chief Executive Officer, who also serves on the boards of various Nishat Group companies. He has a Bachelor's degree in Mechanical Engineering from NED University of Engineering & Technology. Mr. Mirza has 40 years of experience in business development and business & corporate management in engineering, technical, and multinational environments. He has served as Managing Director of the Group Companies of Wartsila Corporation (Finland) in Pakistan and Saudi Arabia. He is supported by a team of qualified professionals across key functions. The technical team reports to the General Manager (Power), who monitors and reviews operations and maintenance performance on a daily basis and reports directly to the CEO, ensuring effective oversight and operational efficiency.


Effectiveness

Nishat Power has enhanced its functions by introducing a Strategic Planning Division; the division will give the strategic insight to the Company, and also at the group level to have a competitive edge.


Control Environment

Various MIS reports are prepared for the management to keep track of all operating activities and operational efficiencies. Apart from daily reporting, a more detailed MIS on a monthly basis is also generated.


Operational Risk
Power Purchase Agreement

Nishat Power’s revenues are derived from the sale of electricity to the power purchaser, NTDC/CPPA-G, under a long-term Power Purchase Agreement (PPA). In line with the agreement, the Company remains entitled to capacity payments as long as it maintains the required benchmark availability and remains ready to deliver electricity, irrespective of actual dispatch.


Operation and Maintenance

Nishat Power Limited is managing O&M activities in-house through its own experienced staff. While this approach is expected to generate cost savings, any deviation from operational benchmarks will be borne by the Company.


Resource Risk

Nishat Power has various fuel supply arrangements, mainly from PARCO, Attock Petroleum. While Shell and Chevron Pakistan are the suppliers of additives and lubricants.


Insurance Cover

Nishat Power maintains adequate insurance coverage, aligned with industry practice and project requirements, providing comfort on operational risk mitigation.


Performance Risk
Industry Dynamics

Total electricity generated in the country during 9MFY26 amounted to 93,131 GWh, up 3.3% YoY. March 2026 alone rose 6.3% YoY to 8,939 GWh. As of March 2026, Pakistan's total installed power generation capacity stood at approximately 49,651 MW, up 8.5% from 45,782 MW a year earlier. Clean sources, hydel, nuclear, and renewables combined, account for 50.8% of installed capacity, while thermal's share stands at 49.2%. The fuel mix shifted notably over the period — hydel generation rose 62% YoY and imported coal rose 126%, while RLNG generation fell 67% to 504 GWh on supply disruptions linked to the US-Iran conflict, and nuclear generation fell 12% on annual outages. The adjusted fuel cost of PKR 8.26/kWh exceeded the PKR 8.00 reference cost, prompting a positive Fuel Cost Adjustment of PKR 0.27/kWh.


Generation

Nishat Power generated and dispatched 87,852 MWh of electricity to CPPA-G during 9MFY26 (9MFY25: 51,408 MWh).



Performance Benchmark

The plant operated at an average capacity factor of 6.84% during 9MFY26 (9MFY25: 4.00%) with an availability factor of 98.20% (9MFY25: 98.39%).



Financial Risk
Financing Structure Analysis

Nishat Power's project was financed through a capital mix of 20% equity (USD 46m) and 80% debt (USD 183m). As of 9MFY26, total borrowings stood at PKR 3,963 million, representing short-term facilities utilized for working capital requirements. For 9MFY26, the Company recorded turnover of PKR 5,147 million (9MFY25: PKR 5,216 million) and a net profit after tax of PKR 1,659 million (9MFY25: net loss of PKR 2,113 million), translating into earnings per share of PKR 4.69.


Liquidity Profile

Following the PPA Amendment Agreement effective November 1, 2024, which shifted the capacity/ROE tariff component to a Hybrid Take-and-Pay model, Nishat Power Limited's longstanding receivables were settled, with trade debts falling from PKR 14,426 million as at FY24 to PKR 1,662 million as at FY25, before rising again to PKR 2,504 million by 9MFY26 as billings resumed.


Working Capital Financing

Total receivables from the Power Purchaser stood at PKR 2,504 million as at 9MFY26. Management continues to actively pursue recoveries and remains engaged with relevant stakeholders to ensure timely realization of outstanding amounts. The Company continued to meet its working capital needs through a combination of internal cash generation and short-term borrowings.


Cash Flow Analysis

Cash and bank balances stood at PKR 30.48 million as at 9MFY26 (PKR 8,526 million at 9MFY25), while short-term investments amounted to PKR 19,672 million, reflecting the deployment of surplus liquidity into mutual funds and other investment vehicles. The Company's short-term borrowings stood at PKR 3,963 million as at March 31, 2026.


Capitalization

The Company's capital structure is now completely debt-free on a long-term basis, with the project-related debt of PKR 14,164 million fully repaid in June 2020.
 
 

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Nishat Power Limited


Financial Summary

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(PKR mln)


 Mar-26
9M		 Jun-25
12M		 Jun-24
12M
A. BALANCE SHEET
1. Non-Current Assets 7,150 7,628 8,288
2. Investments 19,672 18,107 4,265
3. Related Party Exposure 2,391 0 0
4. Current Assets 5,582 3,416 25,344
a. Inventories 1,554 811 2,559
b. Trade Receivables 2,504 1,662 14,426
5. Total Assets 34,795 29,150 37,897
6. Current Liabilities 1,198 455 2,320
a. Trade Payables 970 230 1,649
7. Borrowings 3,963 720 2,960
8. Related Party Exposure 0 0 0
9. Non-Current Liabilities 0 0 0
10. Net Assets 29,634 27,975 32,617
11. Shareholders' Equity 29,634 27,975 32,617
B. INCOME STATEMENT
1. Sales 5,147 7,058 22,505
a. Cost of Good Sold (4,203) (4,400) (17,365)
2. Gross Profit 944 2,658 5,140
a. Operating Expenses (430) (611) (482)
3. Operating Profit 514 2,047 4,658
a. Non Operating Income or (Expense) 1,455 (2,379) 1,070
4. Profit or (Loss) before Interest and Tax 1,969 (332) 5,728
a. Total Finance Cost (31) (43) (34)
b. Taxation (278) (371) (304)
6. Net Income Or (Loss) 1,659 (747) 5,390
C. CASH FLOW STATEMENT
a. Free Cash Flows from Operations (FCFO) 749 2,440 5,334
b. Net Cash from Operating Activities before Working Capital Changes 728 2,385 5,307
c. Changes in Working Capital (1,588) 9,952 (366)
1. Net Cash provided by Operating Activities (860) 12,337 4,941
2. Net Cash (Used in) or Available From Investing Activities (2,465) (12,388) (3,714)
3. Net Cash (Used in) or Available From Financing Activities (1) (3,892) (2,652)
4. Net Cash generated or (Used) during the period (3,326) (3,943) (1,424)
D. RATIO ANALYSIS
1. Performance
a. Sales Growth (for the period) -2.8% -68.6% -2.4%
b. Gross Profit Margin 18.3% 37.7% 22.8%
c. Net Profit Margin 32.2% -10.6% 23.9%
d. Cash Conversion Efficiency (FCFO adjusted for Working Capital/Sales) -16.3% 175.6% 22.1%
e. Return on Equity [ Net Profit Margin * Asset Turnover * (Total Assets/Shareholders' Equity )] 8.1% -2.3% 18.1%
2. Working Capital Management
a. Gross Working Capital (Average Days) 174 503 265
b. Net Working Capital (Average Days) 142 455 244
c. Current Ratio (Current Assets / Current Liabilities) 4.7 7.5 10.9
3. Coverages
a. EBITDA / Finance Cost 30.2 65.6 169.7
b. FCFO / Finance Cost+CMLTB+Excess STB 23.8 57.2 165.2
c. Debt Payback (Total Borrowings+Excess STB) / (FCFO-Finance Cost) 0.0 0.0 0.0
4. Capital Structure
a. Total Borrowings / (Total Borrowings+Shareholders' Equity) 11.8% 2.5% 8.3%
b. Interest or Markup Payable (Days) 94.0 3.0 133.9
c. Entity Average Borrowing Rate 1.1% 2.2% 1.4%

Sep-26

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Nishat Power Limited


Rating Scale

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Sep-26

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Nishat Power Limited


regulatory disclosure

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  1. Rating Team Statements
    1. Rating is just an opinion about the creditworthiness of the entity and does not constitute a recommendation to buy, hold, or sell any security of the entity rated or to buy, hold, or sell the security rated, as the case may be. (Chapter III; 14-3-(x))
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      2. PACRA, the analysts involved in the rating process, and members of its rating committee and their family members do not have any conflict of interest relating to the rating done by them (Chapter III; 12-2-(e) & (k))
      3. The analyst is not a substantial shareholder of the customer being rated by PACRA [Annexure F; d-(ii)]
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