Panchakanya Steel Generates Sales Of Rs.10.11 Billion In FY 2022

Panchakanya Steel Private Limited (PSPL), a prominent player in the manufacturing of TMT Steel bars, reported robust financial performance in the fiscal year 2022. According to their financial statement, the total operating income (TOI) surged by 22% year on year (yoy) to reach Rs. 6,749 Mn. This growth was primarily attributed to increased price realizations, despite a decline in the quantity of products sold during FY22. The rise in price realizations was a direct result of the escalating cost of raw materials (billets) in the international market.

However, the company faced some challenges in the nine-month period ending mid-April 2023 (9MFY23), as their total income dropped significantly by 29.86% yoy to Rs. 3,740 Mn. This decline in income raised concerns about the company’s profitability, which has been volatile over the period of FY20 to FY22, remaining relatively lower than pre-COVID levels. Factors such as competitive pressures and sluggish demand have prevented PSPL from fully passing on the increased production costs to the final product prices, leading to lower margins compared to historical levels.

Despite these challenges, there was a glimmer of hope for PSPL in FY22, as the PBILDT (Profit Before Interest, Taxes, Depreciation, and Amortization) margin showed improvement, increasing by 140 basis points (bps) yoy to 5.37%, primarily supported by the higher price realizations.

In the fiscal year 2022, PSPL’s financials demonstrated a 17% yoy increase in the income from operations (sales), reaching Rs. 10,109 Mn, with a PBILDT margin of 5.78% (compared to 5.21% in FY21).

Founded on May 31, 1995, PSPL operates its manufacturing facility in Bhairahawa, Nepal, and boasts an installed capacity of 150,000 Metric Tons Per Annum (MTPA) as of mid-January 2022.

The company draws strength from its solid promoter group, the Panchakanya Group, a well-established business conglomerate in the Nepalese market since the 1970s. The Panchakanya Group has a diversified presence across multiple sectors, including trading, manufacturing, energy, and automobiles.

The management of PSPL is overseen by a seven-member Board of Directors, led by Chairman Mr. Prem Bahadur Shrestha, a veteran with over five decades of experience in the import/export business. Additionally, Mr. Pradip Kumar Shrestha, the Managing Director, brings more than four decades of experience within the various entities of the Panchakanya Group.