The Pakistan Credit Rating Agency Limited (PACRA) has reaffirmed the entity ratings of The Hub Power Company Limited (PSX: HUBC) at ‘AA+’ for the long term and ‘A1+’ for the short term, accompanied by a ‘Stable’ outlook. This rating action underscores the company’s robust business profile and solid performance as a diversified energy conglomerate, even as it navigates a strategic transition.
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The ‘AA+’ rating denotes a very high credit quality with strong protection factors, while the ‘A1+’ short-term rating reflects the company’s superior capacity for timely repayment. The stable outlook indicates that these strengths are expected to be maintained in the near to medium term.
Diversified Business Profile & Strategic Partnerships
The ratings are anchored in HUBCO’s strong business risk profile and the strategic value of its diversified portfolio, which spans power generation, mining, upstream oil & gas, and electric vehicles (EVs). The company maintains a significant presence in the domestic energy market through key investments and partnerships, including:
- Power Generation: Stakes in Narowal Energy Limited, Laraib Energy Limited, China Power Hub Generation Company, Thar Energy Limited, and ThalNova Power Thar (Private) Limited.
- Operational Support: A wholly-owned subsidiary, Hub Power Services Limited, provides critical operations and maintenance services for the group’s power assets.
- Oil & Gas Exploration: An 8% equity interest in Sindh Engro Coal Mining Company (SECMC) and a 50% stake in Prime International Oil & Gas Company, which holds Eni Pakistan’s former upstream assets.
- EV Mobility: A notable entry into the EV sector through Mega Motor Company Limited, in collaboration with BYD, with the first locally assembled vehicle expected by Q4FY26. Additionally, HUBCO Green (Private) Limited has been established to develop a nationwide EV charging network.
Financial Strength & Deleveraging
Financially, HUBCO has demonstrated resilience. For the first half of FY26, the company reported an unconsolidated net profit of PKR 14.64 billion, up from PKR 13.60 billion in the same period last year. While consolidated profitability saw a slight dip to PKR 25.62 billion, primarily due to the termination of the base power plant, this was offset by maiden dividend declarations from Thar Energy Limited and ThalNova Power.
Crucially, the company has executed a significant deleveraging strategy. Total borrowings have been drastically reduced from PKR 41.53 billion in FY24 to just PKR 2.40 billion by December 2025, improving the leverage ratio to 3.3% from 36.0% in June 2024.
Future Outlook & Key Considerations
Looking ahead, PACRA notes that while HUBCO’s financial profile is currently very strong, the planned investments in the EV segment, which have achieved financial close, are expected to materially increase group-level leverage. The ratings will remain contingent on the effective execution of these new ventures, the continuity of strong dividend flows from its subsidiaries, and the disciplined management of expansion-related borrowings.
The successful completion of the base power plant termination and the strategic pivot into new, high-growth sectors like EVs demonstrate management’s proactive approach. The ‘Stable’ outlook reflects the agency’s expectation that the company will navigate this transition while preserving its financial health.
About PACRA
The Pakistan Credit Rating Agency Limited (PACRA) is a premier credit rating agency in Pakistan, providing independent, in-depth, and prospective credit opinions to the capital markets.
About The Hub Power Company Limited
The Hub Power Company Limited (HUBC) is Pakistan’s first and largest Independent Power Producer (IPP) and has evolved into a diversified energy and industrial conglomerate, with assets across power generation, fuel mining, upstream oil & gas, and electric vehicle mobility.
