Despite improvements in operational revenue during the COVID-19 pandemic in 2022, steel and iron rod manufacturing companies have witnessed a steady decline in earnings in the following years. This downturn is attributed to reduced economic activity in the country, a slowdown in the construction sector even during peak seasons, and a decrease in private housing and residential construction.

According to rating agencies’ reports covering the period from 2021 to March 2025, multiple steel industries have experienced a decline in operational revenue. Industries producing TMT iron rods and various other iron-based construction materials have followed a downward trend in earnings. An analysis of the operational income trends of four steel industries, which have developed strategic plans for loan expansion, indicates a consistent decline in recent years.

Three rating agencies—ICRA Nepal, CARE Ratings, and Infomerics—assessed the financial status of Jagdamba Steels Limited, Panchakanya Steel Pvt. Ltd., Hama Iron & Steel Industries Pvt. Ltd., and Pashupati Iron & Steel Pvt. Ltd. in the past year. Their findings reveal a drop in operational revenue across all these companies.

After showing improvement in 2022, the revenue of Jagdamba, Hama, Panchakanya, and Pashupati Iron has since been on a continuous decline.

Industrialists state that while the number of industries has increased, demand has not kept pace, leading to shrinking revenue. Although the operational revenue of these four companies grew in the fiscal year 2021/22 compared to the previous year, it has declined in the last two years.

Pashupati Murarka, director of Pashupati Iron & Steel, which operates a factory in Sunsari, stated that despite an increase in the number of steel industries in the market, demand has not grown proportionally, preventing revenue from rising.

"The delay in government projects and the inability of construction companies in receiving timely payments have also affected revenue," Murarka explained. "Additionally, private home and housing construction has slowed significantly. Large houses remain vacant for rent, and those who can afford to spend have migrated abroad, reducing the demand for new houses."

While factory operations continue, the business remains unsatisfactory. "Steel demand should increase by 10% annually, but this has not happened. Currently, industries are running at only 50% of their capacity," he added.

Ujjwal Kumar Shrestha, Executive Director of Panchakanya Group, echoed similar concerns, stating that the increase in the number of industries has not matched market demand. "The construction sector involves multiple components, not just steel. Last year, all trade sectors saw a decline, with steel revenue falling by over 50%," he said. "Production capacity is high, but consumption has fallen, leading to a lack of market confidence."

Economic stagnation has directly impacted the operational revenue of these industries. However, Shrestha noted a slight improvement in the fiscal year 2024/25 compared to the previous year. He added, "Before the 2015 earthquake, there were 18 rolling mills in Nepal. This number later rose to 31. However, by last year, seven of these industries had shut down, leaving only 24 operational. Out of these, only 17 to 18 steel industries are engaged in regular production."

Jagdamba Steels Limited received a credit rating from Infomerics Credit Rating Nepal Limited in March 2025 for both short-term and long-term loans. The company’s operational revenue has been declining for the past two years. Operating through 590 dealers across the country, Jagdamba reported an operational revenue of Rs 29.72 billion in the fiscal year 2023/24, which is lower than in previous years.

The company has an annual production capacity of 2.44 million metric tonnes and manufactures various iron-based construction materials such as TMT steel wires and angles. Backed by investment from the Shanker Group, Jagdamba recorded Rs 5.66 billion in operational revenue in the first quarter of the fiscal year 2024/25. The company’s plant is located in Simara, and its total rated loan amount stands at Rs 33.15 billion, according to Infomerics.

In July 2024, CARE Ratings assessed Panchakanya Steel Pvt. Ltd.’s creditworthiness for a loan of Rs 5.14 billion, revealing a declining trend in operational revenue. Although Panchakanya’s revenue increased in the fiscal year 2021/22 compared to 2020/21, it contracted again in 2022/23. The company, which recorded an operational revenue of Rs 6.74 billion in 2021/22, reported Rs 5.11 billion in revenue in 2023/24.

Established in 1995, Panchakanya’s steel factory is located in Bhairahawa, Rupandehi. The industry has an annual production capacity of 150,000 metric tonnes and manufactures TMT steel bars, among other construction materials.

Infomerics Credit Rating Nepal Limited rated Hama Iron & Steel Industries Pvt. Ltd. for a total loan amount of Rs 4.35 billion, covering both short-term and long-term credits. According to a credit rating report published in May 2024, the company’s operational revenue has been gradually declining.

In the fiscal year 2021/22, Hama recorded an operational revenue of Rs 3.80 billion. However, in 2022/23, this figure dropped to Rs 1.87 billion.

In the first six months of the fiscal year 2023/24, the company’s operational revenue stood at Rs 690 million. Located in Simara, the company’s factory has an annual installed capacity of 120,000 metric tonnes and produces various iron products, including TMT bars and binding wires.

According to a credit rating report published by ICRA Nepal in June 2024, Pashupati Iron & Steel Pvt. Ltd. saw an increase in operational revenue in the fiscal year 2022/23 compared to the previous year. However, the first nine months of the fiscal year 2023/24 indicated a potential decline.

In the fiscal year 2021/22, the company recorded an operational revenue of Rs 4.20 billion, which increased to Rs 4.68 billion in 2022/23. However, in the first nine months of the 2023/24 fiscal year, its revenue stood at only Rs 2.02 billion.

Part of the Murarka Group, Pashupati Iron & Steel has an annual installed production capacity of 110,000 metric tonnes. The company, which manufactures TMT bars and other iron-based products, operates a factory in Sunsari.