NTC profit jumps 232% on flat revenue

Nepal Doorsanchar Company reported net profit of Rs 8.86 arba for the full fiscal year to Ashadh, up 232.2% on a year earlier, on revenue that grew just 1.2% — a gain that came almost entirely from below the operating line rather than from the business itself.

Why it matters: the earnings base the stock is judged against has been reset, and whether that base repeats now matters more than the top line.

An operating year that barely moved

Revenue from contracts with customers came in at Rs 34.95 arba and total income at Rs 39.2 arba, both 1.2% higher. EBITDA rose 6.4% to Rs 20.48 arba — real, but far too small to account for the profit line. Earnings per share went to Rs 49.25 from Rs 14.82, a 232.3% increase, and return on equity to 8.83% from 7%, a gain of 1.83 percentage points. That return is the ratio that explains the year: a still-modest 8.83% on a very large equity base, lifted by the profit jump rather than by any improvement in how hard the capital works.

Balance sheet

Total assets reached Rs 138.13 arba, up 14.4%. Current assets of Rs 53.93 arba, up 20.7%, sit against current liabilities of Rs 20.27 arba, up 8.7%. Equity rose 12.6% to Rs 100.36 arba as reserves and surplus added 15.7% to Rs 82.36 arba, with paid-up capital unchanged at Rs 18 arba. Book value per share moved to Rs 557.54 from Rs 495.33. Profit in the final quarter alone was Rs 2.59 arba, so the tail of the year carried a heavy share of it.

The tape

The shares closed at Rs 920 on 16 October, up 1.1% on the session, 2.45% higher over five sessions and 3.37% over twenty, close to a 52-week high of Rs 942.5. Turnover was thin at Rs 1.76 crore across 256 trades, and the flow leaned one way: 63.8% of trades were initiated by buyers, buying built into the close, and the close sat 0.17% above the session's volume-weighted average. It was concentrated rather than broad — the top three buyers took 57.5% of the buying against 36.8% for the top three sellers — which reads as a few participants absorbing stock from a wider seller base rather than a general re-rating.

What's next

The next test is the first-quarter filing of the new fiscal year, after the annual general meeting and book closure that will show what is distributed against these earnings. What would change the picture is any evidence that the below-the-line swing was a one-off; a repeat, or its absence, settles whether the new earnings base is real. If the buying stays concentrated and the price holds near its high, the market is already leaning that way.