KARACHI: Analysts have warned of a grim financial outlook for K-Electric (KE) following the National Electric Power Regulatory Authority’s (Nepra) revised decision on the utility’s Multi-Year Tariff (MYT) for 2024–2030, predicting a potential annual shortfall of Rs79 billion and a loss per share (LPS) of Rs2.9 for FY24.
In its latest ruling issued on October 20, 2025, Nepra slashed KE’s tariff from Rs39.97 per unit to Rs32.37, introducing significant structural adjustments that analysts believe will severely strain the company’s balance sheet.
A report by AKD Securities estimates the annual shortfall at Rs79 billion, while Topline Securities projects an LPS of around Rs2.2 for FY25, with total losses possibly exceeding Rs600 billion by 2030. These projections are based on reduced return on equity (ROE), transmission and distribution (T&D) losses of 16%, and a 91.5% recovery ratio, compared to Nepra’s benchmarks of 9.71% ROE and 100% recovery.
Nepra’s revised decision replaces the 14% dollar-based ROE approved earlier with a 14.47% rupee-based ROE for both distribution and transmission businesses from FY24 to FY30—without any compensation for currency depreciation. This shift is expected to cost KE an additional Rs3–4 billion annually, according to Topline’s estimates.
KE CEO Moonis Alvi, in response to the revision, expressed deep concern over the decision, stressing that the original tariff was formulated after more than two years of rigorous analysis but was revised “within a few months.” He said the company is now evaluating measures to sustain operations under the new tariff regime and aims to minimise the impact on consumers, though some adverse effects “may be unavoidable.”
