Mahila Laghubitta Q4 Results: Revenue Declines but Strong Profitability and Asset Quality Improvement

Mahila Laghubitta Bittiya Sanstha Limited (MLBSL) has published its audited financial results for the fourth quarter of FY 2024/25, showing weaker revenue but solid profitability, strong returns, and significant improvement in loan quality.

The company reported a total revenue of Rs. 692.44 million in Q4, down 60.77% year-on-year compared to Rs. 652.45 million in Q4 of FY 2023/24. Sequentially, revenue rose strongly from Rs. 605.03 million in Q3 and Rs. 398.71 million in Q2, showing strong recovery momentum despite the YoY contraction.

The gross profit stood at Rs. 299.77 million, with a margin of 43.29%, lower than Q3’s 50.11% and Q2’s 49.09% but above Q4 last year’s 35.02%. This indicates sustained operational efficiency despite revenue pressure.

Net profitability remained robust. MLBSL posted a net income of Rs. 84.15 million in Q4, only slightly below Rs. 90.48 million in the same period last year. Compared to Q1’s Rs. 23.34 million, earnings have improved sharply. The net profit margin stood at 12.15%, down from 17.65% in Q3, but broadly stable compared to last year’s 13.87%.

Return ratios highlight MLBSL’s financial strength. Return on Assets (ROA) stood at 1.53%, compared to 1.86% a year ago, while Return on Equity (ROE) came in at a strong 16.41%, up from 19.77% last year but lower than Q3’s peak of 31.58%. These remain among the highest in the microfinance sector.

On a per-share basis, EPS (annualized) stood at Rs. 38.68, slightly below last year’s Rs. 41.59 but much stronger than Rs. 42.92 in Q1. The reported PE ratio was 60.89, reflecting a premium valuation in line with sector leaders.

From a balance sheet perspective, the book value per share was Rs. 238.07, while the market value per share surged to Rs. 2,355.15, nearly 10x book value, showing very strong investor demand and confidence.

Financial Sector Indicators

• Capital Fund to RWA stood at 9.14%, slightly lower than 8.96% last year, still above the regulatory minimum.

• NPL ratio declined to 1.96%, from 3.02% last year, showing significant improvement in loan quality.

• Loan loss coverage surged to 222.84%, compared to 130.65% last year, reflecting highly conservative provisioning.

• Cost of funds decreased to 6.93%, down from 9.41% last year, improving profitability.

• Base rate dropped to 12.28%, compared to 16.99% last year, easing lending conditions.

• Net interest spread improved sharply to 8.07%, from 4.60% last year, reflecting stronger lending margins.

• Net liquid assets stood at 5.38%, lower than 6.50% a year ago but within comfortable liquidity levels.

Dividend per share has not yet been announced for FY 2024/25.