Power Generation Sector — PSX Analysis
The power generation sector includes IPPs that sell electricity to the national grid under long-term Power Purchase Agreements (PPAs). Companies generate stable cash flows from capacity payments and energy payments.
At a Glance
- Companies tracked
- 5
- Valuation approach
- Dividend payers
- Reference P/E
- 6-8x
- Reference P/B
- 1.5-2.2x
- Reference dividend yield
- 7-10%
Reference ranges are SeekhKar editorial benchmarks for comparison, not live market figures. To check a company against them, use today's price from your broker and its latest reported EPS, book value and dividends. Models used: Dividend discount model and Two-stage DCF.
Power Generation Stocks Compared
The listed companies side by side on their latest results: P/E, P/B, dividends, growth and debt.
All KSE-100 comparisons by sectorEarnings Drivers
Plant availability, fuel costs, capacity payments under PPAs, and resolution of circular debt.
Key Metrics to Watch
Plant availability factor, heat rate, capacity payments, and receivables aging.
Investment Risks
Circular debt is the primary risk, along with fuel supply disruptions, regulatory changes to PPA terms, and foreign currency exposure on debt.
How to Value Companies in the Power Generation Sector
Dividend payers. Mature businesses that distribute most of their earnings. The dividend discount model is the primary lens, cross-checked with an asset- or cash-based model.
Dividend discount model
Next year's dividend ÷ (required return − dividend growth): suits companies that pay out most of their profit.
Two-stage DCF
Future free cash flow discounted back to today: suits companies whose cash flow is steady enough to forecast.
SeekhKar's own models assume a 18% required return for this sector and 3% long-term growth. Use them as a starting point in the calculators and test higher and lower values. These are editorial assumptions, explained on the Methodology page.
Frequently Asked Questions
Calculators for This Sector
Run the methods that suit Power Generation companies with figures from their latest reports: