Bhugarbha Cement’s operating revenue jumps to Rs 1.67 billion in 2025

KATHMANDU: Bhugarbha Cement has recorded a strong financial performance, posting operating revenue of Rs 1.67 billion in 2025, marking a 16.76 percent year-on-year growth, according to the company’s latest disclosures.

The revenue increase represents an additional Rs 280 million compared to 2024, when the company earned Rs 1.39 billion. The growth reflects improved capacity utilization at both its cement and clinker plants, along with higher sales volumes.

The company said stronger plant utilization and better receivables management significantly supported revenue expansion. In recent years, Bhugarbha Cement’s operating income stood at Rs 1.264 billion in 2023 and Rs 1.479 billion in 2022, indicating steady business scale-up.

In 2025, both cement bag sales and clinker sales increased, driving topline growth. Production capacity utilization improved from 52 percent to 66 percent, reflecting stronger market absorption and operational efficiency.

Despite revenue growth, profitability came under pressure due to rising raw material costs, particularly clinker inputs. The company’s PBILTD margin (profit before interest, lease, depreciation, and tax) declined sharply from 29 percent to 15 percent. Bhugarbha Cement reported a net profit of Rs 32 million in 2025.

Founded in 2016, Bhugarbha Cement has rapidly expanded its commercial structure and production capacity. In June 2023, the company was converted into a public limited company with a plan to issue an initial public offering (IPO).

The company is preparing to issue 20 percent of its paid-up capital to the public. Currently, its paid-up capital stands at Rs 505 million. Under its capital expansion plan, the company will first issue 60 percent right shares, raising paid-up capital to Rs 808 million. It will then issue 20 percent IPO shares to increase paid-up capital to Rs 1 billion.

Bhugarbha Cement operates its own limestone mine with a daily production capacity of 3,200 metric tons. The company currently produces Portland Pozzolana Cement (PPC) and Ordinary Portland Cement (OPC).

Its cement production capacity, previously 500 metric tons per day, was expanded to 700 metric tons per day in August 2023. The company also operates a 300 metric ton per day clinker production facility. For clinker manufacturing, it uses raw materials such as fly ash and gypsum, while sourcing the remaining clinker from local suppliers.

Cost pressures have intensified. In 2024, the company’s cost of sales accounted for around 62 percent of total sales, rising to 73 percent in 2025. The company warned that if rising raw material prices cannot be passed on to consumers, profitability will remain under strain amid intensifying competition.

Bhugarbha Cement said volatility in raw material prices and aggressive market competition are directly affecting business performance. Although its own limestone mines, experienced promoters, and established brand provide a competitive edge over standalone grinding units, the company noted that the cement sector remains highly competitive.

Large producers dominate the market, entry barriers are low, and pricing power is limited, keeping most manufacturers in a “price-taker” position. Industry-wide pressure on margins has intensified as cement and clinker prices have declined over the past three years.

The company has more than eight years of operating experience. Its five-member board oversees operations led by Chief Executive Officer Deepak Raj Giri and Managing Director Nandi Keshar Poudel. The company holds a license for a 3,200 metric ton capacity limestone mine in Tinpane, Lumbini, which was extended in August 2023.

Funds to be raised through right shares and the IPO will be used to establish a modern rotary clinker plant, aimed at long-term industrial expansion, cost reduction, and enhanced competitiveness. The company has already submitted its IPO application to the Securities Board of Nepal.

Debt Position

Bhugarbha Cement has significantly increased its borrowing from banks and financial institutions. As of July 2025, the company’s total debt stood at Rs 2.25 billion. By 2026, this figure had risen to Rs 4 billion.

According to the company, it has borrowed Rs 3.04 billion in long-term loans and Rs 959.2 million in short-term loans from various banks, reflecting aggressive capital deployment for expansion.