API Power Company Limited: Profit Growth and Strategic Investments

Api Power Company Limited is a company operating in the renewable energy sector, with a paid-up capital of Rs. 6,37,97,24,200. The company was established as a private company in 5th Ashad, 2060 B.S. and later converted into a public company on 6th Shrawan, 2070 B.S. The company was listed in NEPSE on 2nd Mangsir, 2072 B.S. as ‘API’.

API primarily generates electricity through hydropower and solar power projects. API manages the development, construction, and operation of hydroelectric and solar power plants, supplying the electricity generated to Nepal's national grid. Its major operating hydropower projects include Naugarh Gad (8.5 MW), Upper Naugarh Gad (8 MW), and Mathillo Chameliya (40 MW). It also operates solar power projects and in addition, API invests in other companies and projects, mainly in the energy sector, to expand its business and diversify its investments.

API’s solar projects include:

1. Dhalkebar 1 MW Solar PV Project

2. Simara 1 MW Solar PV Project

3. Chandranigapur 4 MW Solar PV Project

Some of the investments made by API and their stake holdings are:

1. Ingwa Hydropower Limited (25%)

2. Darchula Power Limited (51%)

3. Suryakunda Hydro Electric Ltd. (59%)

The company made the decision to sell 15 lakh units of shares of Ingwa Hydropower Limited (IHL) held under its ownership at the BOD meeting held on Jestha 29, 2083 BS. According to the company, the move aligns with its broader business strategy and investment planning.

Comparison of 4th quarter fundamental indicators in the last three fiscal years:

Overall, API is improving fundamentally. The fourth-quarter financial comparison of API shows a significant improvement in profitability in FY 2082/83. The company's net profit increased to Rs. 96,06,05,093 from Rs. 42,76,59,228 in the previous fiscal year, while earnings per share (EPS) rose from Rs. 7.04 to Rs. 15.06. Net worth per share also increased from Rs. 111.07 to Rs. 119.51, indicating growth in the company's book value per share. Similarly, the P/E ratio declined from 42.04 times to 21.30 times. However, the PBV ratio decreased from 3.09 times to 2.87 times in the latest year but remains higher than the 1.74 times recorded in FY 2080/81.