Hathway Investment Nepal Q4: Revenue Jumps Sharply, Margins Stable, But Valuation Stretched

Hathway Investment Nepal Limited (HATHY) has released its audited Q4 report for FY 2024/25, showing a significant rebound in revenues and steady profitability, though valuation multiples appear highly stretched.

The company posted total revenue of Rs. 197.49 million, a remarkable +275.88% YoY surge compared to Rs. 259.74 million in Q4 2023/24. On a sequential basis, revenue almost doubled from Q3’s Rs. 102.14 million, reflecting strong investment gains and improved operational activity.

Gross profit stood at Rs. 139.30 million, with a gross margin of 70.54%, slightly lower than the extraordinary 98.76% margin in the same quarter last year but still strong by industry standards.

Net income came in at Rs. 64.95 million, down from Rs. 83.99 million in the same period last year but nearly 65% higher than Q3. The net margin was 32.89%, broadly consistent with last year’s 32.34%.

Profitability ratios showed moderate strength. ROA stood at 2.39%, up from 1.81% in Q3 but below the 3.49% of last year. ROE improved to 3.08%, slightly higher than the 2.32% in Q3 but still below the 4.40% reported a year earlier.

Earnings per share (annualized) stood at Rs. 2.29, compared to Rs. 3.26 last year. However, the P/E ratio is extremely high at 531.92, suggesting the stock remains significantly overvalued relative to earnings.

From a balance sheet perspective, book value per share stood at Rs. 75.38, while the market value per share surged to Rs. 1,220.14, reflecting investor speculation and demand despite low earnings yield.

The company did not declare a dividend this quarter, compared to Rs. 10.53 per share distributed last year.