K-Electric's AA long-term rating maintained

June 10, 2026 (MLN): The Pakistan Credit Rating Agency (PACRA) has maintained the entity ratings of K-Electric Limited (PSX:KEL), keeping its long-term rating at AA and short-term rating at A1+ with a stable outlook.

The rating action reflects the company's diversified debt portfolio, ring-fenced collections through the Master Collection Account (MCA) mechanism, and adequate liquidity position supported by sufficient working capital lines and stable operating cash flows.

K-Electric, Pakistan's sole vertically integrated power utility serving Karachi, surrounding areas of Sindh, and parts of Balochistan, underwent a significant governance transition in FY2026 with the completion of a Board reconstitution that had been pending since October 2022.

Thirteen directors were elected at an Extraordinary General Meeting on April 2, 2026, following which the newly constituted Board appointed Shaheryar Arshad Chishty as Chairman on April 15.

 On the same date, Syed Muhammad Taha was appointed permanent Chief Executive Officer, succeeding Syed Moonis Abdullah Alvi, with Adeeb Ahmed maintaining interim arrangements to ensure operational continuity during the transition.

On the regulatory front, KEL's Multi-Year Tariff (MYT) framework for FY2024–FY2030 saw the average allowed tariff revised downward from approximately Rs39.97/kWh to around Rs32.37/kWh following NEPRA approvals across generation, transmission, distribution, and supply segments through 2024–25.

The revision has materially affected the company's projected revenue trajectory, with KEL in ongoing discussions with authorities over tariff adequacy and recovery of prudently incurred costs.

The unresolved tariff framework has also delayed financial reporting, with the most recent audited statements remaining those for the year ended June 30, 2023.

Regulatory authorities have directed the company to publish its FY24 and FY25 financial statements by June 30, 2026.

PACRA noted that KEL's credit profile remains contingent on timely finalization of the revised MYT framework, publication of audited financials for post-FY23 periods, sustained reductions in transmission and distribution losses, improvement in recovery ratios, and resolution of outstanding regulatory matters.

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