Nirdhan Vs Chhimek Vs Swabalamban Laghubitta: See which company excels over others?

November 10, 2019 | Investopaper

Three leading microfinance companies of Nepal have published the unaudited first-quarter report of the fiscal year 2076/77. The companies include:

Nirdhan Utthan Laghubitta

Chhimek Laghubitta 

Swabalamban Laghubitta

All these microfinance companies have delivered a strong quarterly report with profit growth above 40 percent for all three. Let’s make a financial comparison of these 3 microfinance based on the following indicators:

Paid-up capital & Reserve:

Nirdhan Utthan Laghubitta leads in terms of paid-up capital and total reserve. Nirdhan has Rs. 1.20 Arba as a paid-up capital with the highest reserve of Rs. 2.30 Arba. Chhimek Laghubitta is a close second with Rs. 1.18 Arba capital and Rs. 1.86 Arba as a reserve. Similarly, Swabalamban Laghubitta has a capital of Rs. 62.89 crores with a total reserve of Rs. 1.36 Arba.

Borrowings, Deposits, and Loans:

Nirdhan Utthan has the highest borrowings of Rs. 7.56 Arba followed by Swabalamban Laghubitta with borrowings of Rs. 6.52 Arba. Likewise, Chhimek Laghubitta has the lowest borrowings of Rs. 4.55 Arba.

In terms of deposit collection, Chhimek Laghubitta leads with a total deposit of Rs. 16.05 Arba. Nirdhan Utthan has a deposit collection of Rs. 11.65 Arba. Similarly, Swabalamban Laghubitta has collected total deposits of Rs. 8 Arba until the first quarter of this fiscal year.

Nirdhan Utthan Laghubitta has floated the highest loans of Rs. 20.14 Arba. Chhimek Laghubitta falls behind with a small margin with total loans of Rs. 19.79 Arba. Likewise, Swabalamban has provided loans of Rs. 15.05 Arba until this period.

Net Interest Income and Net Profit:

Chhimek Laghubitta leads with the highest net interest income and net profit of Rs. 49.54 crores and Rs. 22.26 crores respectively. Likewise, Nirdhan Utthan Laghubitta has earned Rs. 45.88 crores as net interest income and Rs. 21.64 crores as net profit. Swabalamban Laghubitta is behind with Rs. 32.07 crores and Rs. 12.20 crores as net interest income and net profit respectively.

Non-Performing Loan (NPL) and Cost of fund

Chhimek Laghubitta has the lowest NPL with 0.3 percent. Likewise, Nirdhan Utthan Laghubitta has the lowest cost of funds with 8.65 percent.

Earnings Per Share (EPS), Net-worth Per Share, Market Price, and P/E ratio

Swabalamban Laghubitta has the highest EPS and Net worth per share of Rs. 77.62 and Rs. 316.43 respectively. Chhimek Laghubitta has an EPS of Rs. 75.46 and net worth per share of Rs. 257.86. Likewise, Nirdhan Utthan Laghubitta has an EPS of Rs. 72.12 and net worth per share of Rs. 292.

The share price at the end of the first quarter of Nirdhan, Chhimek, and Swabalamban stood at Rs. 860,  Rs. 965 and Rs. 915 respectively. At this price, Swabalamban Laghubitta has the lowest p/e ratio of 11.79.

Dividend Announcement

From the profit of the fiscal year 2075/76, Chhimek Laghubitta has announced a highest dividend of 44.3354 percent. Likewise, Nirdhan Utthan Laghubitta has proposed a 40.53 percent dividend. Similarly, Swabalamban Laghubitta declared a 40 percent dividend to the shareholders.

Conclusion

All three microfinance are financially strong. The financial indicators or ratios are almost similar along with the dividend payout. Hence, investors won’t go wrong if they include any one or all three stocks in their portfolio. The final decision to invest in the shares of these companies lies in the hands of the investors.

The comparative performance is also shown in the table below:

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