Kathmandu: Ambe Steels, which is currently in the process of launching its Initial Public Offering (IPO), has reported a turnover exceeding Rs 6 billion during the first nine months of the current fiscal year. Financial disclosures reveal that the company achieved a total revenue of Rs 6.188 billion during this period.
The company’s historical performance shows a fluctuating yet significant revenue stream, recording Rs 9.109 billion in 2025, Rs 8.059 billion in 2024, Rs 8.348 billion in 2023, and Rs 10.878 billion in 2022. Despite some previous volatility, the company managed to achieve a 13 per cent growth in turnover during the last fiscal year.
In terms of profitability, the company’s operating profit margin saw a slight improvement in absolute terms, rising to Rs 765 million in the last fiscal year from Rs 750 million in 2024. However, the profit margin relative to total turnover saw a marginal decline, dropping from 9 per cent to 8 per cent. Net profit also faced a downward trend, falling to Rs 189 million last year compared to Rs 230 million in 2024.
The company’s cash reserves showed signs of strengthening, increasing from Rs 282 million in 2024 to Rs 388 million in the last fiscal year. During the first nine months of the current fiscal year, the company generated an operating profit of Rs 419 million; however, it ultimately incurred a net loss of Rs 10 million during that same period.
The financial structure of Ambe Steels remains heavily reliant on debt. Total debt rose from Rs 4.198 billion in 2024 to Rs 4.727 billion in the last fiscal year. By the end of the first nine months of the current fiscal year, high utilization of working capital loans caused total debt to surge significantly to Rs 6.14 billion. This increasing dependency on credit has pushed the overall gearing ratio from 2.30 to 3.02 as of last April, which has subsequently weakened the company’s debt safety indicators.
Additionally, the ratio of Total Outside Liabilities to Tangible Net Worth increased to 3.96 during the first nine months of the current year. This follows a brief period of improvement where the ratio had dropped to 3.55 last fiscal year from 3.78 in 2024. While the interest coverage ratio improved to 2.16 last year, the debt service coverage ratio saw a decline, settling at 1.10.
The company’s financial flexibility remains constrained by its capital-intensive nature, characterized by high inventory levels and outstanding receivables. According to recent credit ratings, the company’s future stability will depend on its ability to enhance profitability, manage working capital effectively to reduce debt, and successfully execute the proposed IPO to utilize the proceeds as planned.
Founded in 2007 under the Ambe Group, the company transitioned into a public entity in 2023. It currently boasts an annual production capacity of 238,400 metric tons, producing steel rebars, billets, and GI wire, along with 3 million square meters of gabion boxes. Its products are widely distributed under the Ambe TMT and Ambe GI brands.
The company’s ownership is held by Shovakar (Hari) Neupane (24 per cent), Shiwaj Neupane (18 per cent), Sajjan Agrawal (12.50 per cent), and Shivani Neupane (11 per cent). For its credit facilities totalling Rs 6.3034 billion, Infomerics Ratings has assigned a ‘BBB-’ rating for long-term loans worth Rs 1.8799 billion and an ‘A3’ rating for short-term loans worth Rs 4.4235 billion.
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