Nepal Insurance or Prabhu Insurance, Which one is better?

Kathmandu: Nepal Insurance Company Limited and Prabhu Insurance Company Limited are among the oldest non-life insurance companies in Nepal. The price of both the companies has crossed Rs 1,000 in the secondary market. A comparative study of these two non-life insurance companies:

Note: Bonus shares are taken on the basis of shares held after book close for the purpose of taking paid up capital. Earnings per share are calculated on the basis of shares held after book close.

Based on paid up capital:
Based on the data after the book close, the paid up capital of Nepal Insurance is Rs 1.24 billion while the paid up capital of Prabhu Insurance is Rs 1.16 billion.

Based on reserve fund:
Nepal Insurance is ahead on the basis of reserve fund. Nepal Insurance has accumulated Rs 401.7 million in the reserve fund while Prabhu Insurance has Rs 289.3 million in the reserve fund.

By insurance fund:
Prabhu Insurance is ahead on the basis of insurance fund.Prabhu Insurance has accumulated Rs 788.9 million in its insurance fund while Nepal Insurance has accumulated Rs 507.1 million in its insurance fund.

Based on total and net premium earnings:
Nepal Insurance has earned a total of Rs 968.4 million in premiums and Rs 581.8 million in net premiums. Similarly, Prabhu Insurance has collected Rs 1.15 billion in total premiums and Rs 461.4 million in net premiums.

Based on net profit:
Nepal Insurance has made a net profit of Rs. 170.1 million till the third quarter of the current FY while Prabhu Insurance has made a net profit of Rs. 159.8 million.

By earnings per share:
The annualised EPS of Nepal Insurance is 18 rupees 26 paise while the annualised earnings per share of Prabhu Insurance is 18 rupees 34 paise.

Price earnings ratio:
Based on the market price on June 15, the P/E ratio of Nepal Insurance is 65 times and the P/E ratio of Prabhu Insurance is 60 times. In terms of price and income, Prabhu Insurance seems to be cheaper than Nepal Insurance.

(The comparative analysis is based on the financial statements published by the respective company. This analysis is not complete. Investors are advised to do more research before making an investment decision.)

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