Infomerics Credit Rating Nepal Limited (Infomerics Nepal) has assigned an issuer rating of ‘IRN BB- (Is)’ to Prabhu Helicopter Limited (PHL), reflecting a moderate risk of default in meeting its financial obligations on time. At the same time, the rating agency assigned ‘IRN BB-‘ to the company’s long-term bank facilities, comprising USD 2.32 million and NPR 304.75 million, while its short-term bank facilities of NPR 65.10 million received an ‘IRN A4’ rating.
According to Infomerics Nepal, the ratings recognise Prabhu Helicopter’s decade-long operational experience, improving financial profile, strengthened capital structure and experienced management team. However, they also highlight challenges arising from the company’s dependence on Nepal’s seasonal tourism industry, geographic concentration of operations in the Everest region and exposure to volatile aviation fuel prices and foreign exchange fluctuations.
Ratings Reflect Improving Business Fundamentals
Infomerics Nepal stated that the assigned ratings are supported by Prabhu Helicopter’s operational track record since taking over the business of Muktinath Airlines in 2015. Over the years, the company has established itself as one of Nepal’s recognised helicopter charter operators, providing a wide range of aviation services, including heli sightseeing, mountain rescue missions, medical evacuations, heritage tours, charter flights and aerial surveys.
The rating agency also noted that the company benefits from an experienced board of directors and professional management team. The board is chaired by Subash Amatya, who has more than two decades of experience in banking, hydropower, insurance, investment, tourism and aviation management. Meanwhile, the company’s day-to-day operations are overseen by Chief Operating Officer Novel Kumar Rajlawat, who has been associated with Prabhu Helicopter for the past eight years. Infomerics Nepal further observed that the promoters have consistently extended financial support during challenging periods, demonstrating their long-term commitment to the company.
Financial Performance Shows Strong Recovery
The rating report highlighted a significant improvement in the company’s financial performance over the past five years despite setbacks caused by operational disruptions. Prabhu Helicopter generated total operating income of NPR 125 million in FY2021, which increased sharply to NPR 228 million in FY2022 before reaching NPR 417 million in FY2023, driven by strong recovery in tourism and increased helicopter charter demand following the COVID-19 pandemic.
However, revenue declined by approximately 37.7 percent to NPR 260 million in FY2024 after one of the company’s helicopters was grounded during the first quarter due to operational issues. The aircraft was later disposed of by the end of the third quarter, temporarily reducing the company’s operating capacity. The company subsequently recorded a moderate recovery in FY2025, with operating income increasing by 9.6 percent to NPR 285 million following fleet optimisation and improved operational efficiency.
Infomerics Nepal noted that despite revenue fluctuations, Prabhu Helicopter has maintained positive EBITDA over the past four years, with its EBITDA margin improving to 46.04 percent in FY2025, reflecting improved operational profitability. The company’s profitability also strengthened considerably. After recording a net loss of NPR 217 million in FY2021, largely due to high depreciation and finance costs, Prabhu Helicopter gradually returned to profitability, reporting positive earnings in FY2023 and FY2024 before achieving a substantial net profit of NPR 100 million in FY2025. The improvement was attributed primarily to lower depreciation expenses, reduced finance costs, and better operational performance.
Capital Structure and Debt Servicing Improve
Infomerics Nepal also highlighted significant improvements in Prabhu Helicopter’s capital structure and debt servicing capacity. The company’s overall gearing ratio improved to 1.24 times in FY2025, compared to 18.06 times in FY2021, mainly due to increased equity capital and stronger net worth. Similarly, the Total Outside Liabilities to Tangible Net Worth (TOL/TNW) ratio improved to 1.31 times, while the interest coverage ratio strengthened to 3.01 times, indicating enhanced ability to meet interest obligations through operating earnings.
Gross cash accruals also increased substantially, reaching NPR 103 million in FY2025, compared to a negative position in FY2021, reflecting healthier cash generation from operations. According to the rating agency, these improvements have enhanced the company’s financial flexibility despite the acquisition of an additional helicopter during FY2025.
Regulatory Entry Barriers Support Established Operators
The report also pointed to favourable industry dynamics for existing helicopter operators. Infomerics Nepal stated that the Civil Aviation Authority of Nepal (CAAN) imposes stringent licensing requirements, including minimum equity capital, technically qualified personnel and mandatory fleet ownership standards. These regulatory requirements create substantial entry barriers for new operators, providing an advantage to established companies such as Prabhu Helicopter by limiting excessive competition within Nepal’s helicopter aviation market.
Heavy Dependence on Khumbu Region Remains a Key Risk
Despite the company’s operational improvements, Infomerics Nepal identified significant risks associated with its business model. The report noted that approximately 58 percent of Prabhu Helicopter’s revenue in FY2025 originated from the Khumbu region, making the company heavily dependent on tourism and aviation activity around the Everest region. Additional revenue came from Manaslu (around 10 percent), Simikot (8 percent), Kanchenjunga (5 percent), mountain rescue operations (5 percent), and other destinations. Such concentration exposes the company to geographic risks, as adverse weather conditions, avalanches, natural disasters or aviation disruptions in the Everest region could significantly affect operations and revenue generation.
Tourism Seasonality Continues to Influence Revenue
The rating agency also highlighted the seasonal nature of Nepal’s helicopter industry. Demand for helicopter charter services remains closely linked to Nepal’s spring and autumn trekking and mountaineering seasons, particularly between March and May and September and November. These two peak tourism seasons accounted for approximately 69 percent of Prabhu Helicopter’s annual revenue in FY2025, demonstrating the company’s reliance on tourist arrivals during favourable weather conditions. Consequently, maintaining financial stability during the off-season remains an important challenge for the company.
Exposure to Fuel Prices and Foreign Exchange
Another major concern identified by Infomerics Nepal is the company’s exposure to aviation turbine fuel (ATF) prices and foreign exchange risk. Fuel expenses accounted for around eight percent of annual revenue during FY2024 and FY2025. As aviation fuel prices remain highly volatile, significant price increases could reduce operating margins.
Additionally, Prabhu Helicopter carries USD-denominated long-term debt of USD 2.32 million, while helicopter maintenance, spare parts, and several operational expenses are also denominated in US dollars. As a result, continued depreciation of the Nepali rupee against the US dollar could increase financing costs and place additional pressure on profitability.
Future Rating Outlook
Infomerics Nepal stated that Prabhu Helicopter’s future rating profile will largely depend on its ability to diversify its revenue base beyond the Khumbu region, maintain healthy profitability despite fluctuations in aviation fuel prices, and strengthen operational resilience against seasonal tourism cycles. The agency also indicated that sustained improvement in financial performance, together with enhanced geographic diversification and prudent debt management, would support the company’s credit profile over the medium term.
About Prabhu Helicopter Limited
Prabhu Helicopter Limited was incorporated as a private company before taking over the operations of Muktinath Airlines Private Limited in 2015. The company was subsequently converted into a public limited company on 14 July 2022. Headquartered in Kathmandu, the company currently operates a fleet of two Airbus helicopters and employs more than 59 professionals. It provides helicopter charter services across Nepal, including mountain rescue operations, emergency medical evacuation, pilgrimage flights, aerial surveys, heritage tours, heli sightseeing and customised charter services.
As of mid-July 2025, the company had a paid-up capital of NPR 637.5 million, with Sunrise Holding Limited and Subash Amatya serving as its major shareholders. The company continues to play an important role in supporting Nepal’s tourism, emergency response and remote-area connectivity through specialised helicopter services.
