INFORMATION OF KUSHTIA

                                    INFORMATION OF KUSHTIA

Five Energy Generating Companies In DSE

Analysis Five Energy Generating Companies In DSE : DSE listed five power generating companies named Summit Power Company Ltd (DSE: SUMITPOWER), Summit Purbanchol Power Company Limited (DSE:SPPCL), Khulna Power Company Ltd. (DSE: KPCL), Barakatullah Electro Dynamics Ltd. (DSE: BEDL) and GBB Power Ltd. (DSE: GBBPOWER) has been done to assess relative financial health of the respective businesses. This may be used as a guideline for potential investment on share of these companies.

The present generation capacity of the country is 6,065 MW against maximum peak demand of approximately 7,500 MW. A forecast of Peak Demand for the next nine years is as follows as per Bangladesh Power Development Board (BPDB):

As demand for electricity is foretasted to grow on an average rate of 11% for next eight years. we can expect that power generation companies’ future outlook is very opportunistic in view of future market demand and economic growth of the country.










A glance at the current financial indicators shows that profitability recorded at the end of the latest accounting period is comforting for all except for SUMITPOWER and BEDL. Though electricity produced and sold by four companies other than KPCL could not increase in 2012, current turnover growth and liquidity position of the industry is pleasing due to increase in tariff on electricity. In 2012, the largest private power generating company, SUMITPOWER sold 1805636MWH electricity which is slightly less than what it sold in 2011. A 19.05% fall in profit of SPL in 2012 is attributed to significant increase in general expenses and financial expense.
However, the plunged net profit margin of 42.20% is still showing SUMITPOWER as the highest profit earning company. On the contrary, KPCL’s profit of Q3 2012 registered 81.38% growth in profit over previous year. Power generation of two new rental power plants of 115 mw (KPCL Unit-2) and 40 mw (Khan Jahan Ali Power Company Limited) capacities has brought in robust growth in turnover and liquidity. Moreover, cost cutting advantage by operating new rental power plant named Khanjahan Ali Power Company Limited gave a competitive edge in business for this company. KPCL’s forward EPS of 5.11 also suggest that investor of this company would get higher return on investment compared to its peers. SPPCL, the subsidiary of SUMITPOWER, and SUMITPOWER did not behave alike in 2012. While most of the plants of SUMITPOWER produced less power compared to previous year, SPPCL’s energy sold increased by around 7.6% in 2012. Net profit margin rose up from 7.40% to 13.96%. Though KPCL acquired a small growth in turnover of only 7%, efficient financial cost management supported to hoard more profit for the year. GBBPOWER and BEDL are two small companies in this group. Though the liquidity position and debt to equity ratio are exhibiting sound financial performance for these two companies, NPAT growth shows plunge in profit for BEDL. Fall in six months (July- December, 2012) sales revenue and sudden hike in general expense of BEDL can be considered as threats for Investors. However, there is high chance of turnaround if new rental power plant of BEDL (Baraka Patenga Power Limited) can start commercial production in this year. Thereby, scrutinizing all the financial accounts and ratio analysis we can conclude that KPCL and SPPCL will outperform the market in coming days.