Nirdhan Utthan Laghubitta Q4 Results: Strong Income Growth, Lower NPL, and Improved Profitability

Nirdhan Utthan Laghubitta Bittiya Sanstha Ltd. (NUBL) has published its audited financial results for the fourth quarter of FY 2024/25, showing strong revenue growth, higher profitability, and improved asset quality indicators.

The company reported a total revenue of Rs. 3.56 billion in Q4, up 5.67% year-on-year compared to Rs. 3.72 billion in Q4 of the previous fiscal year. On a sequential basis, revenue increased from Rs. 2.55 billion in Q3, marking a recovery from earlier quarters where income growth had slowed.

The gross profit stood at Rs. 1.77 billion, with a gross margin of 49.61%, slightly higher than 46.88% in Q3 and in line with industry averages. The improvement in margin shows the institution’s ability to control operating costs while expanding its microfinance lending base.

Profitability surged significantly. The company posted a net income of Rs. 836.08 million in Q4, compared to Rs. 506.47 million in the same quarter last year. This translated into a net profit margin of 23.49%, an improvement over 18.82% in Q3 and 13.63% in Q4 of FY 2023/24.

Return indicators further strengthened. Return on Assets (ROA) rose to 3.03%, compared to 1.81% in Q4 last year, while Return on Equity (ROE) improved to 15.68%, up from 10.81%. These figures highlight efficiency gains in asset utilization and stronger value creation for shareholders.

On a per-share basis, EPS (annualized) climbed to Rs. 32.01, compared to Rs. 19.39 in Q4 of the previous year. The reported PE ratio for Q3 stood at 27.33, showing that NUBL remains attractively valued compared to its earnings power.

From a balance sheet perspective, the book value per share increased to Rs. 221.22, while the market value per share in Q3 stood at Rs. 670.54, reflecting strong investor demand and confidence in the microfinance leader.

Financial Sector Indicators

• Capital Fund to RWA improved to 16.62%, indicating solid capitalization above regulatory requirements.

• NPL ratio declined to 8.44%, compared to 10.60% a year ago, showing improvement in credit quality.

• Loan loss coverage rose to 126.83%, reflecting strengthened provisioning against potential defaults.

• Cost of funds remained stable at 8.23%, while the base rate rose to 13.06%, keeping lending rates elevated.

• Net interest spread stood at 6.13%, slightly down from 6.68% in Q3 but still healthy.

• Credit to deposit ratio reached 121.14%, reflecting aggressive lending growth, though liquidity indicators remained tight with net liquid assets at 0%.