PACRA Maintains the Entity Ratings of The Hub Power Company Limited

The rating reflects HUBCO’s role as a holding company with a diversified presence across multiple segments of Pakistan’s particularly energy sector. Through strategic investments in Narowal Energy Limited, Laraib Energy Limited, China Power Hub Generation Company, Thar Energy Limited, and ThalNova Power Thar (Pvt.) Limited, the Company has established a significant footprint in the Country’s energy generation. Hub Power Services Limited, a wholly owned subsidiary, is engaged in providing Operation and Maintenance (O&M) services for HUBCO’s power assets, while the Company also holds a 49% stake in China Power Hub Operating Company (Pvt.) Limited, a joint venture with China Power International Maintenance Engineering Company, for managing O&M at the 1,320MW supercritical coal-fired power plant at Hub. HUBCO also owns an 8% equity interest in Sindh Engro Coal Mining Company, supporting the Thar coal mining projects. Furthermore, through its subsidiary Hub Power Holdings Limited (HPHL), the Company holds a 50% stake in Prime International Oil & Gas Company, which has acquired the upstream assets of ENI Pakistan. To support its strategic move and further diversify its portfolio, HUBCO has recently entered the electric vehicle (EV) sector through its wholly owned subsidiary, HPHL, and its associated company, Mega Motor Company Limited, via a joint venture arrangement with BYD. Additionally, HUBCO Green (Private) Limited (HGL), a wholly owned subsidiary of HPHL, was incorporated in November 2024 with the strategic objective of developing a nationwide EV charging infrastructure. During 6MFY25, HUBCO’s unconsolidated profitability remained sound, to PKR 13.6bln (FY24: PKR 33.8bln, 6MFY24: PKR 14.9blln), while consolidated profitability clocked to PKR 25bln (FY24: PKR 75.2bln, 6MFY24: PKR 35.5bln). Going forward, profitability may experience decline due to the early termination of the PPA for the RFO-based power plant and the potential conversion of hybrid terms for PPAs of other IPPs within the power portfolio. However, HUBCO’s strong equity base, healthy cash flows, and low leverage, since most of the debt has been paid off, provide comfort to the assigned ratings. Current debt on the company’s balance sheet reflects strategic financing needs and is expected to rise in order to support its new investment portfolio, particularly in the automobile sector.
The assigned rating reflects HUBCO’s established operating track record and the financial strength of the group, as evidenced by its strategic investment portfolio. The recent expiry of the PPA for HUBCO’s base plant, along with ongoing negotiations led by the task force to transition parts of its energy portfolio into hybrid models, has affected the company's revenue generation and profitability. Nonetheless, HUBCO’s strategic pivot towards diversification - including ventures into mining through ENI and entry into the automobile sector via Mega Motors - marks a critical evolution in its business model. The continued success and execution of these initiatives, along with sustained dividend flows from its profitable subsidiaries, will remain key considerations for the company’s rating going forward.

About the Entity
Incorporated in 1991, HUBCO is a leading listed entity with major institutional shareholders, including Mega Conglomerate (19.48%) and Fauji Foundation (8.5%). The remaining shares are held by financial institutions, corporates, and the general public. Under the leadership of Mr. Kamran Kamal, who has been with the company for nearly a decade, HUBCO is guided by an experienced management team committed to operational excellence and long-term strategic growth.