Infinity Laghubitta profit growth turns positive in Q2
8th February 2026, Kathmandu
Infinity Laghubitta Bittiya Sanstha Limited (ILBS) has achieved a major financial milestone by turning its performance from a deep deficit into a strong surplus during the second quarter of the fiscal year 2082/83. According to the latest unaudited report for the period ending Poush 2082, the company has successfully reversed its previous year losses, posting a net profit that signals a potential long term recovery for the Gaidakot based microfinance institution.
Infinity Laghubitta profit growth
The return to profitability follows a challenging period where the institution faced significant headwind including rising non performing assets and broader economic pressures affecting the micro credit sector in Nepal. However, the first six months of the current fiscal year have shown that strategic restructuring and a focus on core revenue streams can lead to a significant bottom line turnaround.
Financial Performance Summary
According to the data for the second quarter, Infinity Laghubitta earned a net profit of Rs 5.98 crore. This is a remarkable shift from the net loss of Rs 9.46 crore reported during the same six month period of the previous fiscal year. Such a transition from a loss of nearly Rs 10 crore to a profit of Rs 6 crore highlights the success of the management efforts in stabilizing the business model.
The annualized earnings per share for the review period stands at Rs 24.07, providing a much needed boost to shareholder confidence. In the previous year, the EPS had plunged into negative territory, which had previously caused the stock to face downward pressure in the secondary market. The current net worth per share is reported at Rs 136.88, indicating that the capital base is beginning to repair itself after the erosion caused by prior year losses.
Drivers of Revenue and Growth
The primary engine behind this profit growth has been the substantial increase in net interest income. For the period ending Poush 2082, net interest income rose to Rs 21.20 crore, a significant jump from the Rs 12.90 crore recorded in the corresponding period of the previous year. This growth suggests that the company has been able to improve its interest spread and optimize its lending operations even as the overall sector faces tighter regulatory oversight.
In addition to rising income, the company has managed to expand its operational volume. Deposit collection reached Rs 1.42 billion, up from Rs 1.39 billion in the prior year. Similarly, total loan disbursements increased to Rs 5.73 billion from Rs 5.62 billion. While the growth in volume appears conservative, it reflects a cautious and calculated approach to lending, ensuring that new disbursements are higher quality than in the past.
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The Challenge of Non Performing Loans
Despite the positive profit story, Infinity Laghubitta faces a growing challenge in its asset quality. The non performing loan ratio has increased significantly, reaching 17.85 percent by the end of the second quarter. This is a steep rise from the 9.85 percent reported in the same quarter of the last fiscal year.
A non performing loan ratio of nearly 18 percent is a major concern for any financial institution. It implies that a significant portion of the loan portfolio is not generating interest income and may eventually require further provisioning, which could eat into future profits. The rise in NPLs is a systemic issue across the Nepali microfinance sector, often attributed to borrower over indebtedness and recent organized protests against microfinance institutions.
Capital Structure and Reserve Building
The company maintains a paid up capital of Rs 49.74 crore. Its total reserves now stand at Rs 20.64 crore. However, the report indicates a negative balance of Rs 2.29 crore in the general reserve, a lingering effect of the heavy losses incurred in the previous fiscal year.
The total assets of the institution have reached Rs 6.01 billion, showing that the institution remains a significant player in the national level microfinance landscape. To fully recover, Infinity Laghubitta will need to maintain its current profitability for several more quarters to clear its negative reserves and strengthen its capital adequacy ratio in line with Nepal Rastra Bank requirements.
Conclusion and Investor Outlook
The return to profitability for Infinity Laghubitta is a positive headline for the 2082/83 fiscal year. The transition from a loss of Rs 9.46 crore to a profit of Rs 5.98 crore proves that the company has found a way to generate income effectively again. However, the 17.85 percent NPL ratio acts as a significant warning sign for long term investors.
If the management can successfully recover overdue loans and bring the NPL ratio down below the 10 percent mark, the company could see further growth in its share price and eventual dividend capacity. For now, the turnaround is a work in progress that balances strong earnings growth against high credit risk.
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