Most of the investors are complaining microfinance companies are over-valued without making any analysis of them. Earnings and massive reserves of microfinance stimulates greed among investors and the ones who analyze well and pick the microfinance with good fundamentals rarely suffer from losses.
“Investor should follow the trend.” To make gains and to accumulate the opportunities created by the market, one should follow the trend. Those who go beyond the trend might not be able to achieve all the opportunities. Thus, it is our meager effort to simplify the effort of investors to make fundamental analysis on the basis of important ratios.
From the above table, it is concluded that Forward Community Microfinance Bittiya Sanstha Limited (FOWAD) with an annualized earning per share (EPS) of Rs 135.67, net worth per share of Rs 433.81 and Price Earning (P/E) ratio of 24.41 stood at the top of table, which is followed by Nirdhan Utthan Bank Limited (NUBL) with EPS and net worth per share of Rs 83.68 and Rs 354.14 respectively. Among 19 microfinances, EPS of 12 companies is above Rs 20 whereas rest of the 7 microfinances have EPS below Rs 20.
Nerude Lagubitta Bikas Bank Limited (NLBBL) with an EPS of Rs 5.39 only stood at the last of the table showing P/E ratio of 194.33 times.
- Note 1: Capital inserted are highest of paid up capital shown in the first quarter of FY 2074/75 or paid up capital listed in NEPSE.
- Note 2: EPS are annualized, i.e. EPS = (Net Profit divided by No. of Shares Outstanding) times 4
- Note 3: LTP = Last Traded Price in NEPSE on Mangsir 3, 2074.
- Note 4: P/E = LTP divided by Annualized EPS
