NPL - Assured Prospects, (AKD Daily Nov 13 2023)
AKD Daily
NPL - Assured Prospects
- We recommend a ’BUY’ stance on Nishat Power Ltd (NPL) with DDM based June’24 Target Price of PkR42/share alongside DY expectations of 29% during the same period
- GoP’s recent efforts to maintain austerity in terms of passing on power generation costs (and losses) towards the end-users, coupled with additional fiscal support (power sector subsidies: 9.5% of FY23 tax receipts), have provided respite to the sector as a whole.
- NPL’s power generating trends have remained relatively healthier compared to other fuel oil based plants during times of relapsing RFO based power demand. The plant’s average utilization stood at 47%/32% during FY22/23, where-in overall RFO industry’s generation factor stood at 25%/10% during the same period.
- NPL holds a net receivable position of PKR17.1bn (PKR 48.5/sh) as of 1QFY24, providing proper protection in this multi-year high-interest rate cycle, given minimal leverage.
AKD Research
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AKD Securities Ltd. caters to a diversified group of domestic and international institutional investors, high net worth individuals and upscale retail clients, including expatriate Pakistanis. With high quality research, unparalleled execution and distribution capability for both regular and large block trades, AKD Securities Ltd. has earned an outstanding reputation in the Pakistani securities industry.Outside of commercial banks, AKD Securities Ltd. is one of the biggest capital market firms in the country. AKD Securities is the leader in raising and providing risk capital in underwriting, market making and mergers and acquisitions in Pakistan. Good corporate governance and professionalism are emphasized throughout the firm and AKD Securities Ltd. is amongst the very few companies to have introduced a firm-wide comprehensive CODE of ETHICS, overseen by an independent compliance manager.Ultimately, our success is based on the quality of service we provide to our customers and the trust and confidence reposed in us by them. Our focus, therefore, remains on customer satisfaction at all levels in the company.
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