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Pure Energy and Jhapa Energy, two solar energy companies listed on the Nepal Stock Exchange (NEPSE), have published their unaudited annual financial statements for the fiscal year 2025/26. The disclosures show improvements in the financial positions of both companies, although their strategies and challenges differ significantly.

Pure Energy has prioritized investment expansion and future business growth, while Jhapa Energy has successfully turned its previous year’s loss into a profit and improved its earnings per share.

Jhapa Energy posted a notable improvement in profitability. The company, which had recorded a loss of Rs 19.7 million in the previous fiscal year, reported a net profit of Rs 14.6 million in the review period.

In contrast, Pure Energy’s net profit declined by 20.88 percent compared to the previous fiscal year, falling to Rs 25.3 million during the review period.

Pure Energy’s Investment Surges by 481 Percent

Despite the decline in profit, Pure Energy adopted an aggressive investment expansion strategy. The company increased its investment by 481.3 percent in the last fiscal year compared to the previous year.

Its investment rose from Rs 27 million in the previous fiscal year to Rs 157 million in FY 2025/26, indicating a strong focus on long-term business expansion and future revenue growth.

Jhapa Energy’s investment remained relatively stable, with the company investing Rs 20 million during the review period.

Pure Energy also strengthened its retained earnings, accumulating Rs 29.1 million during the period. Jhapa Energy likewise improved its reserve fund, successfully turning a previously negative balance into a positive one.

Jhapa Energy Leads in Earnings Per Share

Based on earnings per share (EPS), Jhapa Energy outperformed Pure Energy. Jhapa Energy reported an EPS of Rs 3.86, while Pure Energy’s EPS stood at Rs 3.16.

However, Pure Energy remains larger in terms of paid-up capital. The company’s paid-up capital stands at Rs 800 million, compared to Jhapa Energy’s Rs 380.19 million.

The net worth per share of both companies ranges between Rs 101 and Rs 103. However, based on the last trading day of the fiscal year, both companies had price-to-earnings (P/E) ratios above 250, indicating that their share prices are trading at significantly high valuations relative to earnings.

According to secondary market trading data from August 21, Jhapa Energy’s share price stood at Rs 1,035, while Pure Energy’s shares were traded at Rs 797.

Financial Discipline at Pure Energy, Technical Challenges at Jhapa Energy

In its business report, Pure Energy stated that electricity supply and payments are being conducted regularly under its agreement with the Nepal Electricity Authority (NEA). The company noted that it has prioritized financial discipline by making timely repayments of bank loans and interest obligations.

The company also claimed that effective maintenance of its solar project has helped minimize technical losses.

Jhapa Energy, however, is facing technical difficulties. The company reported that a fire in one inverter at its 10 MW solar project in Shivasatakshi has reduced the plant’s current generation capacity to 7.5 MW.

According to the company, insurance claims and procurement of replacement equipment are underway, and preparations are being made to restore the project to full capacity soon.

Overall, the financial statements reveal differing approaches within Nepal’s solar energy sector. Pure Energy appears focused on investment expansion and long-term growth, while Jhapa Energy is concentrating on improving profitability and operational efficiency after recovering from previous losses. Nevertheless, the high P/E ratios of both companies suggest that their shares remain expensively valued in the secondary market.

Jalasarokar