KATHMANDU: Intensifying competition in Nepal’s remittance market has begun to weigh on the financial performance of eSewa Money Transfer, the remittance arm of the F1Soft Group, according to a new report by Infomerics Credit Rating Nepal.
The rating agency said growing competition from banks, remittance companies and digital wallet providers has put pressure on the company’s profitability, fee-based income and debt servicing capacity.
According to the report, eSewa Money Transfer’s operating revenue has declined in recent years. Operating income fell from approximately Rs235 million in fiscal year 2022/23 to Rs207 million in 2024/25, reflecting slower revenue growth amid rising competition and pressure on service fees.
The company’s operating profit margin has also narrowed, declining from 24.35% in FY2021/22 to 17.89% in FY2024/25. Although the margin improved to 20.76% during the first 10 months of the current fiscal year, it remains below previous highs.
Net profit after tax has also weakened significantly. The net profit margin dropped from 15.01% in FY2021/22 to 5.38% in FY2024/25, with Infomerics attributing the decline to higher financing costs, lower operating income and increased spending on market expansion.
The report said competition among banks, remittance service providers and digital wallet operators has intensified as companies offer fee discounts, cash incentives and expanded digital services to attract customers. The trend is expected to place additional pressure on eSewa Money Transfer’s market share, business growth and fee-based revenue.
Infomerics also noted some weakening in the company’s debt servicing indicators. Its debt service coverage ratio declined from 2.26 times in FY2023/24 to 1.85 times in FY2024/25, indicating reduced capacity to meet principal and interest obligations, although the ratio remains within an acceptable range.
Similarly, the interest coverage ratio fell from 2.05 times to 1.81 times over the same period before recovering to 2.05 times during the first 10 months of the current fiscal year.
While the company continues to maintain its ability to service interest payments, Infomerics said sustained pressure on profitability has weakened its overall financial profile.
