Trancorp power popped on my radar last week following a large off market trade which occured last week and a much smaller one a few days ago. 

Here is a brief summary of the company’s H1 2025 results and what could cause mometum in the stock. 

About the firm

Transcorp power is 50.99% owned by Transnational Corporation (Transcorp). The firm  owns the Ughelli power genco, and has as holdings in a few other players in the power space 

It has a 5% shareholding in Afam Power Plc, a power generation company located in Rivers State.  

Transcorp power has an indirect stake in Abuja distribution company via its 15% shareholding of Jeolan International Limited. Jeolan owns 60% of Abuja Electricity Distribution Company (AEDC). 

Transcorp Power H1 2025 results

Revenue and profit growth in H1 2025 was pretty decent. 

H1 25 revenue was N205 billion. Up 52% from last year.

PAT rose at a much slimmer rate. N44 billion. Up 19.76% from last year.

Profit margins dipped sharply though. Came in at 21.40% down from 27.5% same period last year

H1 numbers comprise Q1 and Q2. Q1 profit numbers dipped year on year, suggesting there was a rebound in the second quarter.

Receivables are the one of the first numbers i look at when it comes to gencos. Receivables mean money the firm is owed.

As of H1 2025, that amounted to about N365 billion. Its an extremely large amount. About 70% of its total assets.

What could drive momentum? 

A few weeks ago,  players in the power sector to the President a few days ago with respect to legacy debt the  federal government is owing. 

There was a report that the government may issue a bond to sort things out. While the timeline is unknown, one can hazard a guess and estimate this could be done in another 4 to 6 months.

For my own numbers, im working with an assumption that the company ends up with a N100 billion of that money paid in the next 1 year. If/when that happens, that essentially would be equivalent to its full year profit for FY 2025.

Some of that money should filter down to shareholders as a dividend. 

For H1 2025, the company paid an interim dividend of N1.5 amounting to about N11.25 billio

Target price

The stock closed yesterday at N286.5 meaning its trading at 32 times earnings. That’s a bit expensive compared to the broader market, but justifiable due to its historical revenue growth. It is also trading cheaper than Geregu, the other power player listed on the NGX

5 year revenue CAGR was 69.80%

5 year earnings CAGR was 61.50%

What earnings multiplier should one use?

In my opinion, a 35X multiple is fine. That amounts to a target price of 313.5. That’s about 9.34% higher than its current price.

Its not expensive at its current price, but chances of the stock dipping significantly are quite low due to its illiquidity. I have noticed though that the stock has been trading in the 247 range in the last few trading sessions. 

If you are a long term fundamental investor, one can gradually start to accumulate at that price point.

As always. This is not investment or trading advice. Please do your own research.