Cement Companies Lead Manufacturing Sector Recovery in Second Quarter Amid Political Instability

Listed manufacturing and processing companies have posted mixed financial results for the second quarter of the current fiscal year, with cement manufacturers showing strong recovery while multinational corporations face mounting pressures.

Shivam Cement and Sarbottam Cement recorded exceptional profit growth of 528 percent and 123 percent respectively compared to the same period last year. Ghorahi Cement reduced its losses by nearly 60 percent, while Sonapur Minerals and Oil returned to profitability after suffering losses in the previous year.

In contrast, multinational company Unilever Nepal saw its profit decline due to political instability, market sluggishness, and foreign currency impacts. The contrasting performances highlight a clear divergence within the manufacturing and processing sector.

Companies have attributed profit declines primarily to the Gen Z movement on September 8 and 9, political uncertainty, market closures during festivals, and subdued domestic demand. However, companies that implemented cost control measures and improved production efficiency have shown positive results despite the challenging environment.

Among 14 listed manufacturing and processing companies, cement manufacturers demonstrated relatively stronger financial improvement in the second quarter. Shivam Cement led with remarkable growth, posting a net profit of Rs 357 million for the second quarter, compared to just Rs 56.8 million in the same period last year.

Sarbottam Cement more than doubled its profit to Rs 538.3 million, up from Rs 241.4 million in the previous year's second quarter.

Sonapur Minerals and Oil, which suffered a loss of over Rs 122 million in the second quarter of last fiscal year, earned a net profit of Rs 47.5 million this year. The company cited the Gen Z movement, election environment, and slowdown in development works and construction sector as factors affecting business. It also flagged the resurfacing of the dedicated and trunk line dispute as a potential financial risk.

Ghorahi Cement, still operating at a loss, significantly reduced its deficit from Rs 667.1 million in last year's second quarter to Rs 264.9 million this year.

While cement companies showed comparative improvement, multinational company Unilever Nepal witnessed a sharp decline in profit. Fluid political situation, policy and regulatory delays, impact of India's revised Goods and Services Tax (GST), youth emigration, and depreciation of the Nepali currency against the US dollar severely affected Unilever's earnings. Another multinational company, Bottlers Nepal, however, climbed back to profitability from last year's loss position.

Unilever Nepal, the country's largest fast-moving consumer goods manufacturer, saw its net profit for the second quarter decline by 10 percent to Rs 430.9 million compared to the same period last year. In its review, Unilever Nepal described the period up to the second quarter as challenging despite better performance in November and December 2025. The company noted that contraction in sales and inability to adjust prices due to rising raw material costs adversely affected profits.

Bottlers Nepal Tarai, the manufacturer of Coca-Cola, Fanta, and Sprite in Nepal, returned to positive territory with a profit of over Rs 135.4 million after suffering losses in the previous fiscal year.

Bottlers Nepal Balaju also turned profitable this year after incurring losses last year. The company, which suffered a loss of Rs 245 million in the second quarter of the previous fiscal year, successfully earned a profit of Rs 31.2 million this year. According to Bottlers Nepal Balaju, complex and challenging environment, youth emigration, relatively low purchasing power for products, and increased raw material costs due to depreciation of Nepali currency against foreign currency affected overall performance.

Foreign-invested SY Panel Nepal saw its profit decline by over 70 percent. According to Managing Director Maheshwar Karmacharya, protests, disruptions in construction work, and the traditional practice of avoiding new construction during the "Shukraasta" period when Venus is invisible and considered inauspicious for new beginnings affected business.

Reliance Spinning Mills also saw profit decline, earning Rs 137.4 million this year compared to Rs 188.8 million last year. The company attributed the impact to political developments and sluggish domestic market, expressing hope that economic stability would return and market would expand after the upcoming elections.

Shreenagar Agritech Industries, however, significantly increased its profit, raising it from around Rs 5 million last year to over Rs 15.6 million this year. The company attributed this to cost control, efficiency improvement, and productivity enhancement.

Director Mousami Shrestha said the company has expanded contract farming and produced and distributed quality seeds. "By focusing on technology transfer and skill development among associated farmers and ensuring market access for them, we increased the utilization of our industry's production capacity," Shrestha said. According to her, working closely with farmers, adopting integrated concepts like buyback and contract farming, and operating one-stop services increased the company's income.