Nepal Finance Posts Rs. 21.7 Million Q4 Profit Amid Improved Revenue

Nepal Finance Limited (NFS) has published its audited fourth-quarter (Q4) results for FY 2024/25, reflecting a mixed but improving performance compared to the previous year. The company recorded a total revenue of Rs. 339.1 million, up by 24.32% year-on-year (YoY) from Rs. 310.3 million in the same period last year. Sequentially, revenue also marked a strong recovery from Rs. 227.5 million in Q3.

Gross profit stood at Rs. 90.49 million in Q4, with a margin of 26.68%, improving from the previous quarter’s 20.29% though lower than last year’s 35.69%. Net income surged to Rs. 21.74 million, a significant turnaround from the heavy loss of Rs. 24 million in Q1 and a major jump compared to Q3’s Rs. 1.7 million. The Q4 net profit margin was 6.41%, reflecting better operational stability.

On annualized terms, NFS reported an EPS of Rs. 2.86, compared to Rs. 2.48 in Q4 last year. However, the company’s high reported P/E ratio of 258.91 indicates stretched valuations relative to earnings. Book value per share stood stable at Rs. 137.37, while the market price per share closed at Rs. 741.37, reflecting strong investor confidence despite fluctuating earnings.

From a financial sector perspective, NFS maintained healthy capital adequacy with a Capital Fund to RWA of 25.80%, well above regulatory requirements. However, asset quality remains a concern as NPL to Total Loan stood at 9.74%, higher than last year’s 9.11%. The company has kept a strong provision coverage ratio of 83.62%, providing a buffer against potential credit risks. Meanwhile, the cost of funds eased to 6.83%, while the base rate declined to 9.05%, supporting profitability recovery.

Overall, Nepal Finance showed resilience in Q4 with revenue growth and profit recovery, but rising NPLs and high P/E valuations highlight underlying challenges for sustained long-term growth.