Almost 1500 people are unaccounted for and at least 165 have died since a wall of mud and rock collapsed into a river near the Himalayan border with China.
Among the missing are at least 34 Australians, including 15 who were undertaking a trek with US travel company Himalayan Glacier Adventures.
Vasan Srinivasan, who knows 14 Australians on the 13-day tour, said the group were family friends completing a sacred pilgrimage together.
"Hopefully we find them somewhere safe ... I'm just praying every minute," the Confederation of Indian Australian Associations chair told AAP.
The Hindu Indian families from Sydney and Melbourne were active community members who frequently volunteered for causes including mental health awareness.
"They are lovely families, the kids are all studying and they are all very connected to the community," Mr Srinivasan said.
"I'm a bit shaken up, they are 14 of my close family friends."
Earlier on Thursday the tour operator said it had not been able to contact anyone from the group, which included two boys aged 11 and 14, because of damage to mobile networks and electricity infrastructure.
Chief executive Sagar Pandey flew by helicopter to "personally observe the situation and aid with rescue" but was unable to land becaujse of conditions on the ground, the company said.
The tour group took off from Kathmandu on Sunday for a 13-day trek to the sacred Mount Kailash and Lake Manasarovar on the Tibetan Plateau.
Photos posted on social media in recent days showed the Australians smiling upon arrival at Kathmandu Airport and receiving safety briefings.
The Himalayan Glacier website lists "possible landslides on the Nepal side" during tours in August.
Officials at Nepal's tourism ministry told media outlets 340 foreigners were among more than 400 tourists missing after the disaster.
The cause and toll of the natural disaster are yet to be confirmed, but footage and witness accounts are adding to a picture of the flood's devastating path.
Some communities tried in the seconds they had to warn people downstream of the impending flood, University of Sydney disaster management expert Soniya Rijal said.
"People were informing their relatives and neighbours via call saying, 'the flood is coming, please be careful, evacuate'," she told AAP.
"However, people did not believe it because it wasn't raining. They thought they would be okay."
Dr Rijal survived the 2015 Nepal earthquake and said she could only imagine the panic being felt by those in the disaster zone.
"I think this situation is a little different, but the panic would be similar," she said.
The Nepalese Embassy in Canberra said efforts to locate and rescue those affected, and assess the full extent of human casualties and damage, were ongoing.
Dr Rijal said the Nepalese Army would respond to the disaster and had deployed helicopters to assist in the early stages.
Prime Minister Anthony Albanese urged Australians in the affected area to follow the advice of local authorities, adding officials were working to confirm their welfare.
Department of Foreign Affairs and Trade personnel were being deployed to the region, Foreign Minister Penny Wong said.
Smartraveller has updated its travel advice, urging people to exercise a high degree of caution because of major flash flooding and a mudslide.
Australians in need of urgent help should contact the Department of Foreign Affairs and Trade's 24- hour consular emergency centre.
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