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Trishuli Hydropower Company Limited is currently operating at a loss. However, evaluating its future solely on the basis of its current financial position would provide an incomplete picture.

The company’s main asset is the 37 MW Upper Trishuli-3B Hydropower Project, which has the potential to transform its current loss-making position into a source of revenue and profit once electricity generation begins.

By the third quarter of the current fiscal year FY 2025/26, the company had incurred a net loss of approximately Rs. 94 million. As regular income from electricity generation has not yet begun, the financial burden associated with the under-construction project is reflected in the company’s current financial statements.

However, the company’s shares are currently trading at Rs. 486.50. Over the past 52 weeks, its share price has ranged from Rs. 377.60 to Rs. 689. This suggests that the market is valuing the company not only on the basis of its current losses but also on the future revenue potential of the project and the company’s potential financial capacity.

Revenue Base Set to Change Once Generation Begins

The biggest challenge currently facing Trishuli Hydropower Company is completing the project. Once this challenge is overcome, the company’s revenue base will also change.

Upper Trishuli-3B is a 37 MW hydropower project. Once construction is completed and the project enters commercial operation, the company will begin generating regular revenue from electricity sales. This will create a basis for covering the construction-related expenses and financial obligations currently reflected in its accounts through electricity sales revenue.

In this sense, the company’s current losses should be viewed less as long-term losses arising from business operations and more as a transitional financial situation associated with the construction phase of the project.

Transmission Infrastructure Ready, a Positive Factor

Another positive aspect for the project’s future is the availability of transmission infrastructure. Construction of the transmission line from Samundratar to the Trishuli-3B Hub Substation has already been completed. This means an important bottleneck in the infrastructure required to evacuate electricity into the national grid once the project starts generation has been removed.

The decisive issue for the company now is to complete the project on time and bring it into operation.

If the project is delayed, the burden of the company’s loans and other financial obligations could persist for a longer period. However, if construction is completed on schedule and electricity generation begins, the company has strong potential to move from its current loss-making position to a phase of regular revenue and profitability.

Share Price Also Reflects Future Expectations

The company’s share price also reflects this mixed market sentiment. On the one hand, the company is currently operating at a loss, and its share price has fallen by around 29 percent from its 52-week high. On the other hand, the share price remains above its 52-week low of Rs. 377.60.

The technical indicators also show mixed signals. The latest market price is above the 20-day moving average of Rs. 481.09, while it remains below the five-day and 180-day moving averages. This suggests that although there is some short-term trading pressure, market expectations regarding the company’s future have not completely disappeared.

However, expectations in the stock market can differ from a company’s actual financial performance. Therefore, the project’s progress, cost, debt obligations and the timing of the start of electricity generation will ultimately determine the company’s actual valuation.

The Path from Loss to Profit Runs Through the Project

The story of Trishuli Hydropower is not limited to its current profit-and-loss figures. The current loss represents the company’s present condition, while Upper Trishuli-3B represents its future.

Once the project is completed and regular electricity generation begins, the company will have a stable source of revenue. Income from electricity sales could then help cover operating expenses, principal and interest payments on loans, and other liabilities, eventually putting the company on a path toward profitability.

Therefore, rather than simply viewing Trishuli Hydropower as a “loss-making company,” it may be more appropriate to view it as a company with a project that is yet to reach the generation stage.

The company’s success will now be determined not by its share price, but by how quickly and at what cost Upper Trishuli-3B is completed and how efficiently it generates electricity.

The loss is the reality of the present; completing the project and bringing it into operation is the hope for the future. The journey between these two stages will shape the next chapter of Trishuli Hydropower Company’s financial story.

Low Public Float, Limited Supply

Another important factor that could influence Trishuli Hydropower Company’s share price is its shareholding structure. Although the company has a total of 18.525 million shares, a large portion is concentrated among two institutional promoters: the Nepal Electricity Authority (NEA) and Nepal Telecom.

According to the company’s annual report for FY 2024/25, both institutions hold shares worth Rs. 741 million each. On the public shareholder side, the company has paid-up capital worth only Rs. 307.16277 million.

This creates a different picture between the total number of shares listed in the market and the shares actually available for trading. Although around 18.525 million shares are listed, a significant portion is held by institutional entities, meaning the proportion of shares widely available in the market is comparatively small.

As a result, an increase in demand could lead to sharp fluctuations in the share price because of the limited supply.

Investors’ growing interest in Trishuli Hydropower Company may therefore be driven not only by the revenue potential following completion of Upper Trishuli-3B but also by the relatively limited supply of shares available in the market.

The company has set a target of generating an average of 292.58 GWh of electricity annually from the Upper Trishuli-3B project.

Jalasarokar