Surya Nepal Private Limited, one of Nepal’s leading FMCG companies, reported a slight decline in operating revenue for the fiscal year 2023/24, according to a recent credit rating report by CARE Ratings Nepal. The company’s operating income dropped from Rs 28.99 billion in FY 2022/23 to Rs 28.81 billion, reflecting a marginal decrease year-on-year.
Established in 1986, Surya Nepal is majority-owned by India's ITC Limited, which holds a 59% stake. Approximately 39% of the company’s shares are held by Nepali individual and institutional investors, while the remaining 2% is owned by British American Tobacco (Investments) Ltd., UK.
Surya Nepal is primarily engaged in the manufacture and sale of cigarettes, incense sticks, and branded packaged foods. Despite the slight revenue dip, CARE Ratings highlighted several factors contributing to the company's strong financial and operational profile.
Backed by a robust parent company, ITC Limited, Surya Nepal benefits from technical expertise and operational support across multiple domains. ITC’s diversified business portfolio in India includes cigarettes, packaged foods, education and stationery products, personal care items, incense, hospitality, agri-business, and paper products. This relationship offers Surya Nepal a strategic advantage, particularly in research and development and in its core tobacco business.
The company also boasts strong brand equity in Nepal’s tobacco market, with more than 35 years of experience. Its wide range of successful brands, including Surya Legend, Surya 24 Carat, Surya Luxury Kings, Surya Fusion, Surya Slick Bolt, Shikhar Filter Kings, Shikhar Ice Rush, Khukuri Filter, Pilot Filter, Bijuli, and Chautari, caters to varied consumer preferences. A deep and extensive nationwide distribution network and state-of-the-art manufacturing infrastructure further strengthen its market position.
Surya Nepal is governed under the strategic leadership of an experienced board. Sanjiv Puri, the company’s chairman, also serves as chairman and managing director of ITC Limited, ensuring close alignment between the subsidiary and its parent organization.
However, the report also notes some vulnerabilities. The company remains heavily reliant on cigarette sales for its revenue, with minimal contribution from its other segments, such as incense and packaged food. This narrow revenue base heightens exposure to sector-specific risks.
The tobacco segment, in particular, faces mounting regulatory and fiscal pressures. CARE Ratings flagged rising excise duties on tobacco products across Nepal as a significant risk to the company’s profitability. As legal cigarettes become increasingly expensive for consumers, demand has begun shifting toward cheaper, untaxed alternatives like chewing tobacco and gutkha, potentially eroding Surya Nepal’s market share in its core category.
Despite these challenges, the company continues to maintain a dominant position in Nepal’s formal tobacco industry, bolstered by its established brands, experienced management, and operational synergies with ITC.
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