Palpa Cement Industries Limited has reported a sharp decline in profitability in the fourth quarter of fiscal year 2082/83 with net profit falling despite strong growth in revenue from operations.

The company reported a net profit of Rs. 4 crore during the review quarter, down 59% from Rs. 9.75 crore recorded in the corresponding period of the previous fiscal year. The decline in profit came despite the company generating significantly higher operating revenue during the period.

Revenue from operations increased 15.90% to Rs. 4.77 billion, compared with Rs. 4.11 billion a year earlier. Other income also more than doubled, rising 100.27% to Rs. 1.81 crore from Rs. 90.54 lakh.

However, the increase in revenue did not translate into stronger earnings. The sharp decline in net profit indicates that the company's costs and other expenses absorbed a larger portion of its increased operating revenue during the quarter.

The decline in profitability was reflected in the company's earnings per share. EPS fell 67.20% to Rs. 1.07, compared with Rs. 3.25 in the corresponding quarter of the previous fiscal year. The fall in EPS was significantly steeper than the decline in net profit, highlighting weaker earnings available on a per-share basis.

Palpa Cement's equity share capital increased 25% to Rs. 3.75 billion, from Rs. 3 billion a year earlier. Other equity also increased marginally by 1.96% to Rs. 1.09 billion from Rs. 1.07 billion.

The company's administration expenses remained broadly stable during the period. These expenses declined marginally by 0.15% to Rs. 11.42 crore from Rs. 11.44 crore. This suggests that the decline in profitability was not driven by a significant increase in administration expenses alone.

On the balance sheet, the company's investment increased 4.23% to Rs. 49.25 crore from Rs. 47.25 crore. Meanwhile, property, plant and equipment declined 1.97% to Rs. 75.92 crore from Rs. 77.44 crore.

Trade receivables also declined 2.71% to Rs. 49.90 crore, compared with Rs. 51.29 crore in the corresponding quarter of the previous fiscal year.

At the end of the review period, Palpa Cement's net worth per share stood at Rs. 129.15, down 4.85% from Rs. 135.74 a year earlier. The decline indicates that net worth on a per-share basis weakened despite the increase in equity share capital.

The company's shares were priced at Rs. 595 at the end of the quarter, implying a P/E ratio of 557.91 times based on its reported earnings. The high valuation multiple stands out against the company's sharply lower EPS.

Overall, Palpa Cement's latest results show a widening gap between revenue growth and profit growth. While operating revenue increased by nearly 16% and other income more than doubled, net profit fell by 59% and EPS declined by more than two-thirds. The results highlight the pressure on the company's ability to convert higher sales into shareholder earnings.