Like its sister concern NPL, Nishat Chunian Power Limited posted a hefty increase in its net earnings in 1QFY15. The rise of 41percent year-on-year in the bottom line came from higher fuel savings and lower O&M expenditure – just like Nishat Power Limited.
With a top line growth of five percent year-on-year,a nd no significant change in the cost of sales, fuel savings escalated due to better fuel efficiency and higher utilisation of around 88 percent in 1QFY15 as against 80 percent in 1QFY14.
Meanwhile, finance cost can be seen to have jumped up as circular debt has gained momentum once again.
Though the firm was able to post significant increase in year-on-year earnings, future profitability of the firm will remain under check due to the ongoing repair and overhaul at the plant facility. Also, the resurgence of circular debt and the investment in coal power project eating away the dividends might keep shareholder wary.

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Nishat Chunian Power Limited (NCPL)
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Rs (mn)                     1QFY15    1QFY14      YoY
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Sales                        6,860     6,550       5%
Cost of sales                5,581     5,551       1%
Gross profit                 1,279       999      28%
Administrative expenses         29        24      21%
Other  expenses                 10        56     -82%
Other income                     9         7      21%
Finance cost                   537       421      28%
Profit after tax               711       505      41%
EPS (Rs/share)               1.935     1.374      41%
Gross margin                 18.6%     15.3%
Net margin                   10.4%      7.7%
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