(SHIVM) Shivam Cements’ Third Quarter Financial Analysis: Profit Doubles Despite Falling Revenue

Shivam Cements Limited has shown a notable financial turnaround in the third quarter of fiscal year 2081/82, particularly in terms of profitability. The company reported a net profit of NPR 400.5 million during this period, which is a staggering 96.08% increase compared to NPR 204.3 million in the same quarter of the previous fiscal year. This impressive growth in profit has come despite a decline in revenue, indicating effective cost control and operational efficiency.

The company’s operating revenue dropped by 10.01%, falling from NPR 5.99 billion in Q3 2080/81 to NPR 5.39 billion in Q3 2081/82. Likewise, other income fell by 27.10%, down to NPR 126.5 million. Despite this dip in overall income, Shivam Cements significantly reduced its total expenses by 7.80%, which played a key role in boosting its bottom line. The combination of reduced spending and efficient operations led to a substantial improvement in net profit.

In terms of investor returns, the company's annualized Earnings Per Share (EPS) surged by 80.63%, rising from Rs. 5.42 to Rs. 9.79. This marks a strong signal for shareholders. However, the net worth per share slightly declined from Rs. 188.19 to Rs. 181.10, a marginal drop of 3.77%, indicating a slight decrease in the company’s overall asset-backed value per share.

From a balance sheet perspective, the company’s paid-up capital rose by 8.55% to reach NPR 5.46 billion, reflecting equity base expansion. The share premium reserve remained unchanged at NPR 956.2 million. Other reserves and surplus dropped marginally by 0.23%, indicating a stable but slightly declining retained earnings position. The company’s property, plant, and equipment value increased by 7.46%, suggesting possible infrastructure enhancement or capacity expansion.

One of the most significant improvements is seen in trade receivables, which fell sharply by 41.65%, from NPR 1.86 billion to NPR 1.08 billion. This suggests that Shivam Cements has significantly improved its credit collection process or tightened its credit policy, improving liquidity and reducing risks from outstanding dues.

In summary, Shivam Cements has delivered strong earnings growth despite revenue pressure, thanks to effective cost management and improved operational practices. If this trend continues in the fourth quarter, the company is likely to post an even stronger annual financial performance, reinforcing its stability and earning potential in Nepal’s cement industry.