DESCO financial analysis: Tk 0.86/kWh spread, 5.47% system loss, FX loans and FY2026 return to profit (Oct 2026)

Investment considerations: a Tk 0.86/kWh spread business that returned to profit in FY2026 because the taka held, not because the spread widened

Dhaka Electricity Supply PLC (DESCO; formerly Dhaka Electric Supply Company Limited) distributes electricity in the north of Dhaka. It buys all its power from the Bangladesh Power Development Board (BPDB) at a bulk tariff set by the Bangladesh Energy Regulatory Commission (BERC), pays Power Grid Bangladesh a wheeling charge, and sells to about 1.28 million consumers (June 2024) at BERC retail tariffs [2 p.15] [2 p.38] [1 p.39]. Its income is the gap between the two tariffs, less the cost of the units lost on the network. The fiscal year ends on 30 June; the audited statements for FY2026 (July 2025 to June 2026) were signed on 12-Oct-2026 [1 p.11].

FY2026 was the first profit after three losses. Profit after tax was BDT 442.0m (EPS BDT 1.01 after a BDT 40.1m dividend on the government's preference shares) against losses of BDT 5,412m in FY2023, BDT 5,056m in FY2024 and BDT 1,252m in FY2025 [1 p.11] [1 p.43] [2 p.64]. The operating business did not improve: distribution revenue fell 1.3% to BDT 6,411m and operating profit fell to BDT 904m from BDT 1,143m. The swing came from the foreign-exchange line (a BDT 44m gain against a BDT 1,693m loss) and from interest income of BDT 1,240m on BDT 22.5bn of cash and deposits [1 p.10] [1 p.11] [1 p.42]. The board proposed a 5% cash dividend (BDT 0.50 a share) on 12-Oct-2026 [11].

Business: 1.28m consumers in north Dhaka, all power bought from BPDB, income is the spread on 7,445 MkWh

DESCO was carved out of the Dhaka Electric Supply Authority (DESA) and took over DESA's Mirpur circle; the government listed 25% of its shares in 2006 and sold a further 10% in 2017, with the proceeds paid to DESA and BPDB for the assets taken over [2 p.39]. A liability of BDT 2,140.6m for assets taken from DESA is still being paid to DPDC; BDT 425.0m was paid in FY2026 [1 p.32]. The shareholders renamed the company Dhaka Electricity Supply PLC at the 28th AGM [2 p.17] [1 p.1].

The network is mostly underground at the higher voltages. At June 2024 DESCO ran 7 132/33 kV grid substations, 53 33/11 kV substations, 51.3 km of 132 kV cable, 648 km of 33 kV cable (no 33 kV overhead line left), 1,986 km of 11 kV overhead and 814 km of 11 kV underground line, and 10,643 distribution transformers; maximum demand was 1,520 MW [2 p.15]. In FY2019 maximum demand was 1,069 MW and there were 4 grid substations [5 p.19].

Customers are mainly households by number and commerce by value. In FY2024, 91% of consumers were residential but they used 58% of the units; commercial users were 7% of consumers and 25% of units; industry 0.25% and 13% [2 p.49]. The FY2026 tariff notes give the same picture in money: domestic tariffs brought 42.8% of sales value on 51.3% of units, commercial and office tariffs 33.0% of value on 26.5% of units [1 p.38] [20].

The income statement is built around the pass-through. 'Value of electricity distributed to consumers' (BDT 77,750m in FY2026) less 'Value of bulk electricity imported from BPDB & wheeling charge' (BDT 71,339m) gives 'Distribution revenue' (BDT 6,411m). Other operating income (materials and meter rent received from consumers, BDT 1,263m, and late payment charges, BDT 367m) and deposit works (BDT 105m) take total operating revenue to BDT 8,146m [1 p.11] [1 p.39]. DESCO says the bulk cost is collected on behalf of BPDB and computes minimum tax only on its net receipts [1 p.42].

Tariff and spread: Tk 0.86 per kWh in FY2026; the June 2026 order lifts DESCO's bulk rate 17.5% to Tk 10.095

Both ends of the spread are set by the regulator, on different dates. The bulk tariff DESCO pays BPDB at 33 kV was BDT 6.4523 per kWh in FY2020 [6 p.122], BDT 8.2480 from 1-Feb-2023 [3 p.49], BDT 8.5880 from 1-Feb-2024 [2 p.38] and BDT 10.0950 from June 2026 [1 p.39]. The wheeling charge to Power Grid rose from BDT 0.2944 (FY2023) to BDT 0.3144 and then BDT 0.3897 per kWh at 33 kV from June 2026 [3 p.50] [1 p.39]. On the retail side, DESCO's average selling price was BDT 8.64 per kWh in FY2023 and BDT 9.72 in FY2024 [3 p.49] [2 p.38]; our calculation from the FY2026 notes is BDT 10.44 [20].

The June 2026 order is the latest. BERC raised the weighted average retail tariff by BDT 1.52 to BDT 10.63 per kWh (+16.68%) and the weighted average bulk tariff by BDT 1.39 to BDT 8.39 (+19.85%) from the June 2026 billing cycle, according to both The Daily Star and The Business Standard on 3-Jun-2026 [12] [13]. A day later BERC withdrew the increase for households using up to 75 units, which cut the average retail tariff to BDT 10.40, according to a BSS report carried by Prothom Alo [14]. The Business Standard reported that BERC put the subsidy need for FY2026-27 at about BDT 56,000 crore before the increase [13]. These averages are national; DESCO's own bulk rate rose by BDT 1.507 at 33 kV (17.5%) [1 p.39].

What matters to DESCO is the absolute gap per unit, not the percentage. In FY2026 DESCO realised BDT 10.444 per kWh sold and paid BDT 9.582 of bulk cost per kWh sold (BDT 9.058 per kWh bought, grossed up for the 5.5% lost), a spread of BDT 0.861 [20]. When the same absolute increase is applied to a smaller retail base than the bulk base it widens the spread; a bulk rise that runs ahead of retail compresses it. That is what happened in FY2023: the bulk rate rose to BDT 8.2480 from February 2023 and the directors blamed the 'uneven increase in wholesale and retail electricity prices' for the fall in gross profit [3 p.50]. The spread fell from BDT 0.886 to BDT 0.428 per kWh and only recovered to BDT 0.913 in FY2025 [20].

The June 2026 order fell in the last month of FY2026, so FY2027 is the first full year at the new rates. On the national averages the retail increase (BDT 1.52, or 1.29 after the 4-June rollback) is a little larger in taka than the bulk increase (BDT 1.39), but DESCO's mix differs from the national one and its bulk rate rose by BDT 1.507 at 33 kV [12] [14] [1 p.39]. Because 51% of DESCO's units are domestic, the carve-out for small households matters; the FY2027 tariff note is the place to read the outcome. History gives the sensitivity: each BDT 0.10 of spread on FY2026 volume is BDT 744m of distribution revenue, 168% of FY2026 profit after tax [20].

System loss: down to 5.47%, but each point now costs Tk 713m, 1.6x FY2026 profit

System loss is the share of purchased units that is never billed: technical losses in cables and transformers plus theft and metering errors. DESCO reports it as the gap between energy bought and energy sold. It was 46.67% in 1997-98, 8.37% in FY2015, 7.11% in FY2019 and 5.58% in FY2024 [2 p.50] [7 p.15] [5 p.19]. From the FY2026 notes it was 5.50% in FY2025 and 5.47% in FY2026 (7,875.73 MkWh bought, 7,444.77 MkWh sold) [1 p.38] [1 p.39] [20]. The Financial Express reported the same 5.47% and quoted DESCO crediting prepaid meters and the removal of illegal connections [16]. The government's annual performance agreement set DESCO a 5.60% target for FY2024, which it met [2 p.46].

The cost of each point of loss has risen with the bulk tariff. At FY2026's bulk cost of BDT 9.058 per kWh, 1pp of loss on 7,876 MkWh bought is BDT 713m, against BDT 356m in FY2019 [20]. That is 1.6 times FY2026 profit after tax. The improvement since FY2019 (1.64pp) is therefore worth about BDT 1,170m a year at today's bulk cost. Further gains are harder: the last three years moved by less than 0.3pp in total, and from June 2026 each point costs about 18% more again because the 33 kV bulk rate plus wheeling rose from BDT 8.902 to BDT 10.485 [1 p.39] [20].

Prepaid metering is the main tool. DESCO began prepaid meters in 2005; by FY2024 about 60% of consumers were on smart prepaid meters and DESCO planned to cover all consumers by 2025 [2 p.50]. It installed 96,514 prepaid or smart meters in FY2024 against a target of 75,000 [2 p.46]. The Financial Express reported that prepaid meters rose from 877,835 to 955,036 during FY2026 and that DESCO attributed more than BDT 4.32bn of additional sales to its loss-prevention measures, including removal of illegal connections [16]; these are DESCO's figures as reported by one outlet and are not in the audited notes. Prepaid customers also pay in advance: DESCO held BDT 629m of unused recharge balances at June 2026 [1 p.35].

Customer classes: households are 51% of units at Tk 8.71/kWh, below bulk cost; commerce pays Tk 13.02

Volume growth in FY2026 came from households and commerce; industry shrank. Domestic tariffs (A, MF3, MT1) sold 3,819 MkWh (+3.6%), commercial and office tariffs (E, MT2, HT2) 1,972 MkWh (+5.4%), and industry (C1, MT3) 804 MkWh (-4.0%) [1 p.38] [20]. Battery-charging stations (D3) grew 33% to 115 MkWh, and a new temporary 33 kV class (HT3) appeared with 62 MkWh [1 p.38].

Realisation differs by class because Bangladesh's tariff cross-subsidises households. In FY2026 domestic classes realised BDT 8.71 per kWh, below DESCO's bulk cost per kWh sold of BDT 9.58; commercial classes realised BDT 13.02 and industry BDT 11.30 [20]. So DESCO loses money on the average household unit and earns it on shops, offices and factories. A shift in mix toward households, or a tariff order that protects small users (as the 4-June-2026 rollback did), narrows the average spread even if headline tariffs rise [14]. The Financial Express reported that consumption in the higher slabs (above 600 units) improved cost recovery, and quoted the managing director attributing the revenue recovery to shifts in consumption across tariff slabs rather than to rate increases [16].

Industrial volume fell 4.0%, and the HT2 commercial class fell 34% to 94 MkWh while HT3 appeared; part of this looks like reclassification between high-tension classes rather than lost load [1 p.38]. Industry is 11% of DESCO's units, so its trend matters less than for a rural distributor.

Line items: staff and depreciation absorb the spread; finance cost, interest income and FX decide the bottom line

Operating costs below the spread are mostly people and depreciation. In FY2026 employee expenses were BDT 2,962m (BDT 2,939m in FY2025), depreciation BDT 2,427m, direct operating expenses BDT 1,369m and administrative expenses BDT 470m [1 p.11] [1 p.45]. Employee costs rose from BDT 1,841m in FY2019 to BDT 2,921m in FY2024 as pay scales and headcount rose (1,995 staff at June 2026) [6 p.94] [2 p.64] [1 p.44]. Depreciation follows the network: direct depreciation rose from BDT 1,237m in FY2019 to BDT 2,208m in FY2026, partly because the 2021 revaluation added BDT 7,179m to fixed assets [6 p.94] [1 p.11] [3 p.50]. Inside direct costs, SCADA software maintenance rose to BDT 158m from BDT 93m, while line maintenance fell to BDT 40m from BDT 112m [1 p.39].

Below operating profit three lines decide the result. Finance cost was BDT 1,732m in FY2026, mostly interest on ADB (BDT 1,301m) and AIIB (BDT 286m) loans [1 p.42]. Interest income was BDT 1,240m, up from BDT 1,010m, on larger short-term deposits (BDT 12.1bn in short-term deposit accounts) [1 p.27] [1 p.11]. The FX line is the swing factor: profit before tax and FX was positive in every year except FY2023-24 (BDT -2,542m and BDT -2,285m, the years of the spread squeeze), while FX losses of BDT 4,285m and 2,431m turned those years into large losses [20].

Tax is charged even in loss years. DESCO paid current tax of BDT 160m in the FY2025 loss year and BDT 229m in FY2026; for FY2026 it computed 20% on taxable income of BDT 1,147m, driven by interest income, and states that minimum tax applies to net distribution revenue plus other income rather than to gross bills [1 p.42]. The effective tax rate was 27% in FY2026 [20].

FX loans: USD 306m on-lent by the government; each Tk 1 on the dollar is about Tk 306m of profit

DESCO's network loans come from development partners through the government. ADB loans 2332, 3087, 3522 and 4399, AIIB loan 003 and JICA loan BD-P97 are subsidiary loans: the government borrows in dollars or yen and re-lends to DESCO, which repays 'in local currency equivalent at the prevailing exchange rate on the date of repayment' [1 p.29] [1 p.30]. The interest goes to the government at 4% to 4.5% a year on the older loans and 6.10% to 12% on loan 4399 (as described under note 22.4) [1 p.29] [1 p.30]. Repayment is in 30 semi-annual instalments after a grace period of 5 to 10 years [1 p.29]. Alongside, 40% of the government's own ADP money comes as taka loans at 3% and 60% as equity [1 p.30] [1 p.31].

At June 2026 the dollar loans were USD 305.6m (BDT 37.5bn at Tk 122.85) and the JICA loan JPY 534.9m (BDT 406m) [1 p.29] [1 p.30] [1 p.42] [20]. Each Tk 1 change in the taka-dollar rate moves the reported loan, and profit, by about BDT 306m. That matches history: the FY2024 loss of BDT 2,431m on a move from Tk 108.74 to 118.00 is BDT 263m per Tk 1 [3 p.50] [2 p.39] [20]. In FY2026 the rate was Tk 122.85 at both year ends, so there was no dollar loss; the yen fell and gave a BDT 44.2m gain [1 p.42]. By 6-Oct-2026 the dollar was at Tk 123.30 [1 p.43], which on the June balance is a loss of roughly BDT 138m if it holds to the next balance date [20].

The repayment wall is close. The current portion of long-term loans was BDT 13.5bn at June 2026 (BDT 11.3bn a year earlier), mainly ADB 3087 (BDT 8.1bn) and AIIB 003 (BDT 2.2bn), and interest payable reached BDT 9.8bn [1 p.10] [1 p.35]. DESCO paid only BDT 573m of interest and repaid BDT 147m of ADB 3087 principal in FY2026 [1 p.13] [1 p.35]. Much of what is 'current' is in fact overdue to the government; the government is lender, owner and tariff-setter at once. The auditor also found that the ADB statement for loan 4399 shows BDT 6,993.8m against BDT 5,763.0m in DESCO's books, an understatement of BDT 1,230.8m [1 p.3].

Capex: Tk 5.0bn spent in FY2026, Tk 41.4bn committed, and a cancelled Gulshan substation still in work in progress

Capex is funded by the state and development partners. In FY2026 DESCO spent BDT 1,580m on property, plant and equipment and BDT 3,394m on network materials and equipment, BDT 4,974m in total (6.4% of electricity sales), against BDT 7,147m in FY2025 [1 p.13] [20]. New loans received fell to BDT 748m from BDT 3,680m and government equity of BDT 1,122m came in as share money [1 p.13] [1 p.28]. Operating cash flow covered the network spend in FY2026 with BDT 2,180m to spare; in FY2025 it fell short by BDT 815m [20].

The pipeline is large relative to the balance sheet. Capital expenditure commitments were BDT 41.4bn at June 2026, of which BDT 34.2bn was contracted but not yet accounted for [1 p.44]. Capital work in progress was BDT 7.2bn [1 p.10]. The prepaid-meter programme has its own government loan line ('BD Prepaid', BDT 418m) [1 p.31], and ADB 4399 runs to 30-Jun-2027 [1 p.30]. One project failed: the Ministry cancelled the Gulshan underground substation (estimated at BDT 950.97 crore) on 26-Sep-2023, and BDT 764.4m of costs remain in work in progress, which the auditor calls 'apparently a total loss' that has not been written off [1 p.2] [1 p.3].

Network additions have kept pace with load. Between FY2019 and FY2024, 33/11 kV substations rose from 39 to 53, distribution transformers from 7,067 to 10,643 and maximum demand from 1,069 MW to 1,520 MW [5 p.19] [2 p.15]. Inventories are large at BDT 6.5bn, 8.4% of annual sales, and the auditor could not verify them because no year-end count was done [1 p.2] [1 p.10].

Receivables: government consumers owed 10.2 months of bills; Bihari Camp's Tk 3.1bn is barely provided

Collection overall is good. DESCO billed BDT 66,851m and collected BDT 66,777m in FY2024, a 99.89% collection ratio, and receivables were 1.43 months of billing against a 1.45-month target [2 p.50] [2 p.46]. Receivable days on electricity sales were 30 at June 2026 against 44 at June 2019 [20].

Government customers are the exception. DESCO's notes split consumer receivables into government, semi-government and private. Government consumers owed BDT 3,038m at June 2020 (6.39 months of their billing) and BDT 1,938m at March 2025 (10.24 months), against 1.25 months for all consumers [5 p.104] [3 p.102] [8 p.9]. Government consumers took 8.2 times as long to pay as the average consumer, up from 3.2 times at June 2020 [20]. The FY2026 statements do not repeat the split. A separate BDT 44.2m is owed by the Ministry of Liberation War Affairs for freedom fighters' bills [1 p.25].

The largest single doubtful balance is not a ministry. The auditor says BDT 3,116.6m is receivable from Bihari Camp (settlements of stranded Pakistanis whose bills have accumulated for years) and BDT 89.9m from others, BDT 3,206.5m that 'appears to be irrecoverable'; DESCO provides only BDT 42.1m (0.25% of receivables, its policy), a short provision of BDT 3,164.4m [1 p.2] [1 p.26]. The board's position in 2024 was that the Bihari Camp amount 'is recoverable' [2 p.39]. If the full shortfall were provided, profit and equity would fall by that amount; at the moment it is a balance-sheet item that does not hit cash.

Ratios: EPS Tk 1.01 vs Tk 2.70 in FY2019; borrowings 2.7x capital and reserves

Returns were thin before the losses and negative during them. ROE on average capital and reserves was 2.5%-3.3% in FY2020-FY2022, -23.4% in FY2023, -28.7% in FY2024, -8.6% in FY2025 and 3.0% in FY2026 [20]. The denominator includes BDT 6.1bn of preference shares and BDT 6.1bn of revaluation surplus, which lower ROE for ordinary holders' purposes; EPS is the cleaner measure: BDT 2.70 (FY2019), 1.15, 1.86, 1.59, -13.61, -12.72, -3.15 and 1.01 (FY2026) [6 p.94] [4 p.81] [2 p.64] [1 p.43].

Leverage has risen. Total borrowings went from BDT 23.5bn (FY2019) to BDT 41.9bn (FY2026) while capital and reserves fell from BDT 18.4bn to BDT 15.6bn, so borrowings rose from 1.28x to 2.68x capital and reserves [20]. Net of cash and deposits, debt was BDT 19.3bn. Interest cover ((PBT + finance cost) / finance cost) was 2.7x in FY2019 and 1.35x in FY2026. Working capital is funded by BPDB: payable days on bulk purchases ran at 75 at June 2026, against receivable days of 30 [20].

Cash conversion is better than earnings suggest because depreciation (BDT 2.4bn) is non-cash and interest is accrued rather than paid. NOCFPS was BDT 15.93 in FY2025 and BDT 17.99 in FY2026, against EPS of -3.15 and 1.01 [1 p.43]. Part of that cash is owed to the government as unpaid interest, so CFO overstates what is free for ordinary holders [1 p.36].

Peers: all three listed network utilities lost money in FY2025; DESCO's 5.5% loss vs Titas's 9.47%

Only two other DSE-listed network utilities exist: Power Grid Bangladesh (transmission) and Titas Gas (gas distribution). Both are state-controlled, have June year-ends and lost money in FY2025. On a like-for-like FY2025 basis from their own annual reports, DESCO's loss was the smallest in taka (BDT 125 crore against BDT 211 crore and BDT 772 crore) and its system loss far below Titas's, although relative to its thin net spread it was the largest [1 p.11] [9 p.38] [10 p.93] [10 p.123]. Titas lost 9.47% of its gas against a BERC allowance of 2% [10 p.93]; Power Grid reported a debt-equity ratio of 83:17 [9 p.38]. Titas states it has no listed peer [10 p.123]. Core revenue is not like for like across the three (DESCO's is a net spread, Titas's a gross gas bill), so the table shows profit against each one's own core line.

On the market, DESCO trades at 0.63x its FY2025 NAV and Power Grid at 0.28x [19] [20]; Titas's NAV was not read for this note. These are facts about prices, not a view on them. FY2026 annual figures for Power Grid and Titas were not in our corpus; DESCO's FY2026 EPS was BDT 1.01.

Balance sheet: five audit qualifications; the equity-reducing ones equal Tk 12.8 of the Tk 39.23 NAV per share

The FY2026 audit opinion is qualified on five bases [1 p.2] [1 p.3]: (1) the BDT 3,164.4m short provision on consumer receivables; (2) inventories of BDT 6,548.6m not counted at year-end (a count on 4-Aug-2026 could not be verified); (3) BDT 764.4m of cancelled Gulshan substation costs still in work in progress; (4) ADB loan 4399 understated by BDT 1,230.8m; and (5) BDT 1,144.8m of deposits in Bangladesh Commerce Bank, First Security Islami, Global Islami, Padma, Social Islami and Union Bank with no impairment. The three items that would reduce equity total BDT 5,074m, 32.4% of capital and reserves, or BDT 12.76 per ordinary share against a reported NAV of BDT 39.23; the ADB 4399 item (BDT 1,230.8m) understates assets and liabilities equally (auditor: BDT 123.44 crore including accrued interest and FX) and does not change NAV [1 p.3] [20]. The auditor says that with the deposit provision alone the FY2026 profit 'would have converted into a loss' [1 p.3].

Emphasis-of-matter paragraphs add four more points: unclaimed dividends older than three years not moved to the Capital Market Stabilization Fund; WPPF not paid to the workers' funds; BDT 1,581m of share money from the government not converted within six months and not counted as potential shares in EPS; and gratuity measured by formula rather than actuarially [1 p.4]. DESCO stopped accruing interest on the weak-bank deposits from 30-Jun-2024 and is waiting for Bangladesh Bank guidance on institutional deposits, after a 31-Aug-2026 circular dealt only with individual depositors [1 p.27]. BDT 2,500m of deposits is under lien for an overdraft [1 p.27].

On the other side of the balance sheet, capital and reserves of BDT 15.6bn include ordinary capital of BDT 3,976m, preference shares of BDT 6,101m, share money of BDT 1,581m and a revaluation surplus of BDT 6,104m, less accumulated losses of BDT 2,124m [1 p.10]. Ordinary holders' claim is therefore smaller than the headline: the preference shares take 15% of their weighted share of profit (BDT 40.1m in FY2026) [1 p.43], and the revaluation surplus is a non-cash uplift booked in 2021 [3 p.50]. Contingent claims are small (BDT 16.5m) but 296 decimals of land are in litigation [1 p.44].

Governance: DPDC holds 67.66% for the government; the FY2026 dividend of Tk 0.50 goes to the 32% minority only

The government controls DESCO through DPDC, the other Dhaka distributor, which holds 268,988,757 shares (67.66%) on behalf of the government; institutions hold 8.61%, the general public 23.69% and foreign holders 0.04% [1 p.27]. In the 2024 report the same block was listed as 'Government' and DPDC was named as holder of more than 10% [2 p.41] [2 p.42]. No director holds shares [2 p.42]. The chairman and directors are nominated by the Power Division; in the 2024 report the chairman was the CEO of the PPP Authority and the board included DPDC's managing director and officials of the Power Division and BPDB [2 p.43] [2 p.14]. The managing directors of DESCO and DPDC sit on each other's boards [2 p.39]. The board met 20 times in FY2024 [2 p.40].

Government money enters as equity, not just loans. Under the ADP rule, 60% of government development funding is equity and 40% a 3% loan; the equity is converted into irredeemable non-cumulative preference shares (BDT 6,077m issued on 11-Jul-2024 and BDT 24m on 29-May-2025 with BSEC consent) [1 p.28]. The Business Standard reported a later BSEC consent for 4.59 crore preference shares with a face value of BDT 45.90 crore against share money [15]. The preference shares took their first dividend in FY2026 (BDT 40.1m) [1 p.43].

Dividends were steady before the losses and then stopped. DESCO paid 12% cash for FY2019 and 10% for FY2020 to FY2022 [7 p.42] [5 p.51] [4 p.48]. For FY2023, a loss year, it paid 10% to non-sponsor holders only (BDT 128.6m) [3 p.55] [2 p.65]. There was no dividend for FY2024, because of the loss and negative retained earnings [2 p.43], nor for FY2025 [15]. For FY2026 the board proposed 5% cash (BDT 0.50 a share), with record date 19-Nov-2026 and the AGM on 16-Jan-2027 [11]. The Financial Express reported that sponsors are excluded [16]; the BDT 6.42 crore total reported by The Business Standard equals BDT 0.50 on the 128.6m non-DPDC shares [15] [20]. DESCO has had a policy since FY2016 of not paying stock dividends [2 p.43].

What's next: Q1 FY2027 by mid-November shows the first quarter at the new tariff; AGM 16-Jan-2027

The near-term calendar is set by the dividend, the first quarter of FY2027 and the full-year effect of the June 2026 tariff. LDC graduation is now 24-Nov-2029, after the UN General Assembly adopted the deferral on 29-Oct-2026 in New York (30-Oct in Dhaka) [17] [18]. DESCO sells no exports, so the direct effect is small; the open question is whether concessional development-partner lending changes after graduation, which DESCO's notes do not address.

Risks: the taka (Tk 306m per Tk 1), the bulk-retail timing and the audit items matter most

The risks are concentrated in four lines. Spread: a bulk order that runs ahead of retail, as in FY2023, cut distribution revenue by BDT 2.5bn in a year [20]. FX: a 10% fall in the taka (about Tk 12.3) on the June 2026 dollar balance is about BDT 3.8bn, about 8.5 times FY2026 profit [20]. Credit: the Bihari Camp and weak-bank deposit items would, if provided, remove BDT 4.3bn of equity [1 p.2] [1 p.3]. Policy: the state can direct DESCO's cash, tariffs and capex and is also its main creditor; minority holders cannot block those decisions.

Key questions: the spread at the new tariff, the dollar and the audit items decide what minority holders keep

DESCO at BDT 22.1 trades at 21.9x FY2026 EPS of BDT 1.01, 0.56x June 2026 NAV of BDT 39.23 and a 2.3% dividend yield for non-sponsor holders [19] [1 p.43]. At FY2019 EPS of BDT 2.70 the same price would be 8.2x. Power Grid trades at 0.28x its FY2025 NAV [20]. These are facts about the price, not a view on it.

FAQ

What does DESCO earn per unit of electricity?

Distribution revenue was BDT 6,411m on 7,444.77 MkWh sold in FY2026, BDT 0.861 per kWh [1 p.11] [1 p.38] [20].

What was DESCO's system loss in FY2026?

5.47%: 7,875.73 MkWh bought from BPDB and 7,444.77 MkWh sold [1 p.38] [1 p.39].

Why did DESCO return to profit in FY2026?

Mainly because the dollar rate was unchanged at Tk 122.85, so the BDT 1,693m FX loss of FY2025 became a BDT 44m gain, and interest income rose to BDT 1,240m [1 p.11] [1 p.42].

What dividend did DESCO declare for FY2026?

5% cash (BDT 0.50 a share), record date 19-Nov-2026, AGM 16-Jan-2027 [11]; The Financial Express reported sponsors are excluded [16].

Who owns DESCO?

DPDC holds 67.66% on behalf of the government; institutions 8.61%, the public 23.69% [1 p.27].

When does DESCO's fiscal year end?

30 June. FY2026 ran from 1-Jul-2025 to 30-Jun-2026 [1 p.11].

Is DESCO's audit opinion clean?

No. The FY2026 opinion is qualified on five bases, including a BDT 3,164m short provision on receivables and BDT 1,145m of deposits in weak banks [1 p.2] [1 p.3].

Sources

1. DESCO audited financial statements, year to 30-Jun-2026 (Hoda Vasi Chowdhury & Co, qualified opinion) · link · accessed 2026-10-31
2. DESCO Annual Report 2024 (year to 30-Jun-2024) · link · accessed 2026-10-31
3. DESCO Annual Report 2023 (year to 30-Jun-2023) · link · accessed 2026-10-31
4. DESCO Annual Report 2022 (year to 30-Jun-2022) · link · accessed 2026-10-31
5. DESCO Annual Report 2021 (year to 30-Jun-2021; five-year technical data FY17-21) · link · accessed 2026-10-31
6. DESCO Annual Report 2020 (year to 30-Jun-2020; FY19 restated) · link · accessed 2026-10-31
7. DESCO Annual Report 2019 (year to 30-Jun-2019) · link · accessed 2026-10-31
8. DESCO unaudited financial statements, nine months to 31-Mar-2025 · link · accessed 2026-10-31
9. Power Grid Bangladesh PLC Annual Report 2024-25 (five-year review) · link · accessed 2026-10-31
10. Titas Gas Transmission and Distribution PLC Annual Report 2024-25 · link · accessed 2026-10-31
11. DSE announcement via AnalystBro events feed: DESCO 5% cash dividend for FY2026, record date 19-Nov-2026, AGM 16-Jan-2027 (13-Oct-2026) · link · accessed 2026-10-31
12. The Daily Star, 'Electricity price hiked: consumers to pay Tk 1.52 more per kilowatt-hour' (3-Jun-2026) · link · accessed 2026-10-31
13. The Business Standard, 'Power tariff hiked 16.7% as govt moves to cut subsidy burden' (3-Jun-2026) · link · accessed 2026-10-31
14. Prothom Alo (BSS), 'Excess power tariff for up to 75 units withdrawn' (4-Jun-2026) · link · accessed 2026-10-31
15. The Business Standard, 'Desco returns to profit after three years, recommends 5% cash dividend' (13-Oct-2026) · link · accessed 2026-10-31
16. The Financial Express, 'DESCO swings to profit as it cuts leakage, secures foreign-exchange gain' (13-Oct-2026) · link · accessed 2026-10-31
17. The Daily Star, 'Bangladesh gets 3 more years for LDC graduation' (30-Oct-2026) · link · accessed 2026-10-31
18. The Business Standard, 'Bangladesh gets 3 more years for LDC graduation' (30-Oct-2026) · link · accessed 2026-10-31
19. AnalystBro price data (TradingView feed): DSE:DESCO, DSE:POWERGRID, DSE:TITASGAS daily bars to 29-Oct-2026 · link · accessed 2026-10-31
20. AnalystBro model for this report (workbook tabs below) · link · accessed 2026-10-31