NEPSE trading

PPL
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By Sandeep Chaudhary

Peoples Power Limited Reports Revenue Stability but Sharp Decline in Profitability in Q4 FY 2024/25

Peoples Power Limited Reports Revenue Stability but Sharp Decline in Profitability in Q4 FY 2024/25

Peoples Power Limited (PPL) has published its audited financial results for the fourth quarter of FY 2024/25, revealing steady revenue but a significant erosion in profitability. The company generated total revenue of Rs. 96.34 million, marking a marginal 1.52% growth year-on-year compared to Rs. 94.92 million in Q4 of 2023/24. However, sequential performance remained weak, with revenue almost flat compared to Q3 and still below Q4 of the prior year, which had reached Rs. 107.79 million.

The gross profit for Q4 stood at Rs. 73.95 million, translating into a margin of 76.76%, noticeably lower than the 85–87% range seen in the previous three quarters. This indicates rising cost pressures, eroding operating efficiency despite maintaining stable revenues.

The most concerning trend was in net income, which fell drastically to just Rs. 3.32 million in Q4, compared to Rs. 7.80 million in Q3 and a much stronger Rs. 30.21 million in Q4 of last year. The net profit margin shrank to only 3.45%, a steep drop from 28.03% in the same quarter last year and 11.20% in Q3.

On an annualized basis, EPS slipped to Rs. 0.52, compared to Rs. 1.64 in Q3 and Rs. 4.78 in Q4 of last year. This deterioration reflects the earnings pressure directly affecting shareholder returns. Consequently, the reported PE ratio surged to 734.74, reflecting extremely high valuation relative to earnings and underlining investor expectations versus weak fundamentals.

The company’s return ratios also weakened. Return on Assets (ROA) dropped to 0.35% in Q4, from 3.10% a year ago, while Return on Equity (ROE) fell to 0.52%, down from 4.90% in the same period last year. These figures highlight reduced efficiency in generating returns from both assets and equity capital.

From a balance sheet perspective, the book value per share stood at Rs. 97.31, while the market value per share was significantly higher at Rs. 385.49. This gap indicates that despite weak profitability, the stock continues to trade at a strong premium, showing investor confidence in PPL’s long-term hydroelectric growth potential.

Dividend per share has not been declared for this quarter, in line with the company’s declining profitability. Investors will likely remain cautious, watching for operational improvements and cost optimization in the coming fiscal year.

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