ICRA Nepal has reaffirmed the credit ratings of Bhat-Bhateni Supermarket and Departmental Store Private Limited (BBSM) and removed the retailer from its “Watch with Negative Implications” status, signaling improving confidence in its financial and operational recovery.

Bhat-Bhateni faced significant losses during the September 2025 civil unrest, with 11 of its 27 outlets across Nepal sustaining severe damage. The total estimated loss was around NPR 9 billion, including approximately NPR 6 billion in inventory losses and NPR 3 billion in property damage.

The retailer has since been gradually restoring its operations. As of mid-July 2026, six of the 11 severely damaged outlets had resumed operations, while the remaining five are expected to reopen before the end of the year.

Despite the disruptions, BBSM generated NPR 27.476 billion in revenue in FY2026, down around 20% from NPR 34.156 billion in FY2025. The decline was primarily attributed to the temporary closure and disruption of multiple outlets following the unrest.

BBSM’s debt-servicing position also improved during the year. Its debt service coverage ratio (DSCR) increased to 1.8x in FY2026, supported by a two-year deferral of principal repayments negotiated with lenders, lower interest rates and insurance proceeds.

The company continues to receive insurance payouts related to inventory and property damage which are expected to provide an important source of liquidity as the retailer completes its recovery.

ICRA Nepal has reaffirmed BBSM’s long-term loan rating of [ICRANP] LBB+ on loan limits of NPR 9.145 billion. Its short-term loan rating remains [ICRANP] A4+ on loan limits of NPR 8.102 billion.

Near-term liquidity remains constrained while outstanding insurance claims are being processed. However, ICRA Nepal expects insurance proceeds over the coming year to cover a substantial portion of the losses, limiting the long-term impact on Bhat-Bhateni’s balance sheet.

The removal from the negative rating watch indicates that while BBSM continues to face recovery-related challenges, ICRA Nepal no longer sees the earlier deterioration in its credit profile as warranting heightened negative monitoring.