Nagarkot Resort Limited (NRL) is expanding its hospitality property in Nagarkot, with the company undertaking an Rs. 801 million project to increase its total room capacity to 85 rooms. The company, incorporated on April 11, 2018, was converted into a public limited company on July 7, 2023. The Nagarkot Resort Limited (NRL) currently operates 24 rooms, while the remaining 61 rooms are being developed under the ongoing expansion project. According to a September 2026 rating report by CARE Ratings Nepal Limited (CRNL), the expansion project had achieved around 98% financial progress as of September 21, 2026, with Rs. 786 million already incurred.
Rs. 801 Million Expansion Project
The expansion is being undertaken to increase the resort’s operating scale and revenue-generating capacity. The total project cost of Nagarkot Resort Limited (NRL) has been estimated at Rs. 801 million and is being financed through a debt-equity mix of 34:66. The financing structure comprises Rs. 273 million in debt, with the remaining amount being financed through equity. The structure has been revised from the initially envisaged 25:75 debt-equity ratio.
The promoters of Nagarkot Resort Limited (NRL) have already infused approximately Rs. 600 million in equity, demonstrating their commitment to the project and reducing the resort’s dependence on external borrowing during the construction phase. As of September 21, 2026, Rs. 240 million of the incurred Rs. 786 million project cost had been financed through debt, while the remaining amount had been funded through equity.
Resort to Offer 85 Rooms
Once completed, Nagarkot Resort will have a total capacity of 85 rooms. The Nagarkot Resort Limited (NRL) plans to provide premium accommodation featuring spacious rooms with private bathrooms, air conditioning, and modern amenities. Each room is planned to include a balcony or terrace offering views of the resort’s garden, swimming pool, or surrounding mountains. The Nagarkot Resort Limited (NRL)’s expansion is expected to significantly increase its capacity to accommodate both domestic and international visitors visiting Nagarkot, one of Nepal’s popular leisure destinations near Kathmandu.
Revenue Reaches Rs. 55 Million
Nagarkot Resort Limited (NRL)’s operating income has increased in recent years as its existing resort has gained operational stability.
| Particulars | FY24 | FY25 | FY26* |
|---|---|---|---|
| Income from Operations (Rs. Mn) | 20 | 49 | 55 |
| PBILDT Margin (%) | 49.23 | 56.47 | 59.18 |
| Overall Gearing (times) | 0.38 | 0.33 | 0.39 |
| Interest Coverage (times) | 1.31 | 3.71 | 3.01 |
| Current Ratio (times) | 9.56 | 0.19 | 0.50 |
| Total Debt/Gross Cash Accruals (times) | 15.20 | 10.60 | 11.77 |
The company’s Total Operating Income (TOI) increased from Rs. 49 million in FY25 to Rs. 55 million in FY26. CARE said the growth was supported primarily by an increase in the Average Room Rate (ARR), which rose to Rs. 8,876 in FY26 from Rs. 7,401 in FY25. Occupancy remained around 60% in both FY25 and FY26, indicating relatively stable demand for the existing property. The company reported Gross Cash Accruals of Rs. 20 million in FY26, compared with Rs. 19 million in FY25.
CARE Reaffirms ‘BB’ Issuer Rating
CARE Ratings Nepal has reaffirmed Nagarkot Resort Limited (NRL)’s issuer rating at CARE-NP BB (Is). According to CRNL, an issuer carrying this rating is considered to have moderate risk of default regarding the timely servicing of financial obligations in Nepal. The reaffirmation takes into account the implementation risk associated with the ongoing resort expansion and the operational stabilisation risk following completion of the project.
CARE has also cited the company’s relatively small existing scale, dependence on a single property, intense competition in the hospitality industry and the cyclical nature of tourism demand as key constraints on the rating. At the same time, the rating is supported by the experience of the promoters and management, the resort’s strategic location, government support for tourism and the increasing trend in tourist arrivals.
Nagarkot Location Supports Tourism Demand
Nagarkot remains one of the most popular short-distance tourism destinations from Kathmandu, known for its panoramic Himalayan views and natural surroundings. The destination provides access to attractions and activities including Nagarkot View Tower, hiking and cycling trails, a Buddhist monastery, the Bat Cave, Boudha Peace Park and Muhan Pokhari waterfall. The resort’s location is therefore expected to support its ability to attract leisure travellers as well as domestic visitors seeking short getaways from Kathmandu Valley.
Tourism Recovery Supports Hospitality Expansion
Nepal’s tourism sector has continued to recover following the severe disruption caused by the COVID-19 pandemic. International tourist arrivals reached around 1.20 million in 2019 before falling sharply in 2020 and 2021 due to travel restrictions and border closures. Arrivals recovered to around 1.16 million in 2025. The sector nevertheless experienced temporary disruption in September 2025 amid nationwide protests and civil unrest, which affected transportation, airport operations and hotel bookings.
Tourism activity subsequently recovered, with international tourist arrivals reaching 692,228 during the first seven months of 2026, representing a 6.8% year-on-year increase, according to the CARE report. The hospitality sector’s performance remains closely linked to tourist arrivals, economic growth, disposable income, air connectivity and the growth of leisure, business and MICE tourism.
Government Support and Tourism Outlook
The government continues to identify tourism as a priority sector and has introduced various incentives for hotels and resorts, including tax concessions and priority-sector lending provisions. The government has also designated FY2023 to FY2033 as Nepal’s “Tourism Decade” with the objective of strengthening the country’s position as an international tourism destination.
For FY2026/27, the government allocated approximately Rs. 7.34 billion for culture and tourism activities and Rs. 2.93 billion for civil aviation development. Key initiatives include tourism infrastructure development, heritage conservation, the Great Himalayan Trail, regional tourism corridors, destination development and improvements to major airports. These measures, along with the recovery of international and domestic tourism, are expected to support the medium-term growth of Nepal’s hospitality industry.
Expansion Completion Remains Key
CARE has identified the timely completion of the expansion project within the planned cost and schedule, followed by satisfactory operational performance, as key factors for Nagarkot Resort Limited (NRL) going forward. The company will also need to increase revenue from its expanded 85-room property while maintaining its margins, particularly as the number of hotels in the Nagarkot area continues to increase. The expansion is expected to substantially increase Nagarkot Resort Limited (NRL)’s accommodation capacity from the existing 24 rooms and provide the company with a larger platform to benefit from the continued growth of tourism in Nagarkot and Nepal.
