Comparative study of second quarter report of micro finance institutes: Chhimek Laghubitta reports the highest profit

Fri, Feb 14, 2020 7:36 AM on Exclusive, Stock Market, Latest,

In NEPSE, there are 50 listed microfinance companies, the number is highest amongst other sector. Among 50 listed companies, Nadep Laghubitta Bittiya Sanstha Limited (NADEP) is yet to publish its 2nd quarter report for 2076/77.

Thus, in this analysis we look into various indicators of 49 listed microfinance companies based on the unaudited 2nd Quarter report of 2076/77.

Paid-up Capital:

The minimum required capital for wholesale level, national, regional and district level microfinance are Rs 600 million, Rs 100 million, Rs 60 million and Rs 10 million respectively. Both Chhimek Laghubitta (CBBL) and Nirdhan Utthan Laghubitta (NUBL) has a paid up capital worth Rs 1.50 arba which is highest in the industry.

Reserves and Surplus:

Microfinance companies with highest reserves and surplus are Sana Kisan (SKBBL), RMDC Laghubitta (RMDC) and Chhimek Laghubitta (CBBL) with Rs 1.72 arba, 1.55 arba and 1.52 arba reserves respectively.

Net Profit:

As of the second quarter report of FY 2076/77, the listed microfinance institutes with the highest net profit are:

  1. Chhimek Laghubitta Bittiya Sanstha Limited (CBBL) with a net profit of Rs 48.16 crores
  2. Nirdhan Utthan Bank Limited (NUBL) with a net profit of Rs 40.42 crores
  3. Sana Kisan Bikas Bank Limited (SKBBL) with a net profit of Rs 30.17 crores

Net worth per Share:

Forward Community Microfinance leads in terms of net worth with Rs 274.42 per share followed by RMDC and Sana Kisan with net worth of Rs 273.34 and 272.88 respectively.

Earnings per Share:

Earnings per Share is one of the key indicators investor need to be updated about as it gives an idea about what the investor might get in return as dividend. Forward Laghubitta (FOWAD), National Microfinance Bittiya Sanstha Limited (NMFBS) and Unnati Laghubitta Bittiya Sanstha Limited (UMB) make to the top list with EPS of Rs 80.33, 70.10 and 70 respectively.

Price to Earnings Ratio (PE):

Price to earnings ratio is one of the important indicators used by value investors to find out possible investment opportunities. The benchmark for PE ratio varies across sectors. As of 2nd Quarter 2076/77, companies with lowest PE ratio are Unnati Laghubitta (UMB), Chhimek Laghubitta (CBBL) and Swabalamban Laghubitta (SWBBL) with PE ratio of 12.54, 13.83 and 14.67 respectively. These PE ratios were published in the quarterly reports.

In a nutshell