COLOMBO, Sri Lanka, 03rd June 2026: JAT Holdings PLC recorded its highest-ever annual revenue in FY25/26, with performance reflecting the continued strength of its core coatings business, disciplined manufacturing strategy, and investments in emerging growth platforms despite a challenging external environment.

For the year ended 31 March 2026, Group revenue increased by 9% year-on-year to Rs. 12.6 billion, compared to Rs. 11.6 billion in the previous year. Local revenue grew by 12% to Rs. 9.7 billion, additionally supported by the EV charger business and the decorative paints segment, while foreign operations recorded Rs. 2.9 billion.

Gross profit rose by 21% to Rs. 4.8 billion, with gross profit margin improving from 34% to 38%. This improvement was a key indicator of the quality of the Group’s growth during the year, supported by a stronger product mix, improved manufacturing control, backward vertical integration, and operational efficiencies across JAT’s facilities in Sri Lanka and Bangladesh.

Profit before tax increased by 5% to Rs. 1.68 billion, while finance costs reduced by 17% to Rs. 292 million due to effective debt management and lower interest rates. Profit after tax stood at Rs. 1.52 billion. Profit after tax was impacted by the reduction of the previous year’s deferred tax asset, which affected year-on-year comparability. Underlying performance remained resilient, with revenue, gross profit, gross margin and profit before tax all improving during the year.

Selling and distribution expenses, as well as administrative expenses, increased during the year, primarily due to the consolidation of Mirotone following its acquisition in October 2025, reflecting the Group’s expanded operating footprint.

Despite the temporary impact of Cyclone Ditwah in Q3, JAT achieved its highest-ever wood coatings sales, with the segment recording 9% growth and a 5% improvement in GP margin. Notably, 83% of wood coatings sales came from the loyalty base, a 16% increase from the previous year’s sales contribution while the loyalty base itself has grown by 10%. The Company also completed the second phase of its binder plant expansion, increasing capacity by 76%. This expansion further strengthened JAT’s backward vertical integration strategy, improving control over critical inputs, supporting margin resilience, and reducing exposure to supply chain and import-related volatility.

The emulsion category recorded 15% sales growth during the year, while product development efforts continued with the further enhancement of Hydro+ waterproofing paint for exterior walls and the development of three new water-based binders for waterproofing paints, interior wood coatings and wall coatings. Brushes continued steady growth, with sales up 12% and GP margins improving by 7%.

The CSE yesterday recorded a bearish trend because investors are shifting to fixed income instruments due to external and internal uncertainties, especially with the escalation of tensions in West Asia.

Amid those developments both indices moved downward. The All Share Price Index down by 340.85 points while S and P SL20 declined by 46.70 points.

Turnover stood at Rs 2.6 billion with six crossings. Those crossings were reported in JKH, which crossed 19 million shares to the tune of Rs 375 million; its shares traded at Rs 19.80, ACL Cables one million shares crossed for Rs 161 million; its shares traded at Rs 93.50, Commercial Bank 250,000 shares crossed for Rs 50 million; its shares sold at Rs 200, Amana Takaful 1.2 million shares crossed for Rs 26 million; its shares sold at Rs 21.30, People’s Leasing 1 million shares crossed to the tune of Rs 21 million; its shares sold at Rs 21 and CCS 150,000 shares crossed to the tune of Rs 20 million; its shares fetched Rs 133.

In the retail market companies that mainly contributed to the turnover were; HNB Rs 291 million (745,889 shares traded), ACL Cables Rs 194 million (two million shares traded), JKH 80.6 million (four million shares traded), Haycarb Rs 28 million (525,000 shares traded), Colombo Dockyard Rs 55 million (525,000 shares traded), Softlogic Life Insurance Rs 60 million (710,100 shares traded) and Commercial Bank Rs 58 million (290,800 shares traded). During the 88 million share volumes changed hands in 30770 transactions.

It is said that manufacturing sector counters, especially JKH, performed well while the banking sector, especially Commercial Bank and HNB, performed well. Further the insurance and leasing sector also performed well.

Yesterday the rupee was quoted at Rs 336.25/35 to the US dollar in the spot market on, from Rs 335.50/336.25 the previous day, while bond yields were somewhat steady, dealers said, with the secondary market “not very active”.

The telegraphic transfer rate for Sri Lanka’s rupee against the US dollar was 331.5000 buying, 340.50 selling; the euro was 379.5100 buying, and 393.4270 selling; pound was 440.8796 buying, and 454.9252 selling.

By Hiran H Senewiratne

‘Market participants appear to be focusing more on underlying vulnerabilities’

Sri Lanka’s banking system continues to show resilience despite mounting domestic and global economic pressures, but developments across financial markets tell a more cautious story, with foreign investors retreating, market volatility rising, and the rupee remaining under pressure despite a major IMF-related inflow.

According to the Central Bank’s latest Financial Sector Performance report, banks and finance companies entered 2026 with strong credit growth, healthy capital buffers, and improving asset quality. Yet the same report points to growing strains in equity, bond, and foreign exchange markets, suggesting investors remain unconvinced that the country’s recovery is firmly on track.

The contrast between financial institutions and financial markets has become increasingly pronounced.

Licensed banks expanded credit by 24.4% year-on-year during the first quarter, while finance companies recorded even stronger growth of 52.4%. Despite this, foreign investors continued to reduce exposure to Sri Lankan assets. Net foreign outflows from the Colombo Stock Exchange reached US$103.4 million during the first five months of the year, extending a trend that has persisted since 2024.

Reflecting this caution, the All Share Price Index fell 1.4% by end-May, while the benchmark S&P SL20 Index managed only a marginal gain of 0.03%. The Central Bank attributed the subdued performance to heightened sensitivity to global risk sentiment, rising domestic inflation expectations, and external shocks, including geopolitical tensions in the Middle East.

An independent analyst told The Island Financial Review that despite Sri Lanka receiving a fresh US$695 million IMF disbursement in late May, the rupee has continued to face volatility and depreciation pressures.

“Market participants appear to be focusing less on short-term inflows and more on underlying vulnerabilities, including a widening trade deficit, higher energy import costs, geopolitical uncertainties, and concerns about the sustainability of external sector gains,” he said.

The analyst noted that the Central Bank itself acknowledged continued volatility in the foreign exchange market amid increasing external pressures. Meanwhile, government securities have also come under strain, with yields rising from March and increasing further after the Central Bank raised policy interest rates in May.

“Such developments indicate that markets are demanding higher returns to compensate for perceived risks, even as macroeconomic indicators show signs of improvement,” he said.

The contrast is particularly striking when viewed against the banking sector’s performance. Non-performing loans continued to decline, with the Stage 3 loan ratio falling to 9.4% from 12.7% a year earlier. Liquidity and capital levels remain comfortably above regulatory requirements, while lending activity has strengthened, pushing the credit-to-deposit ratio above 70% for the first time in three years.

However, the analyst argued that risks may now be migrating elsewhere within the financial system and broader economy. He pointed to the credit-to-GDP gap moving further into positive territory, a development often viewed as an early warning signal of excessive credit expansion and future vulnerabilities. The Central Bank has already tightened lending standards for vehicle financing and gold-backed loans, two segments that have recorded rapid growth.

“While banks remain profitable and well-capitalised, market signals suggest investors are increasingly focused on inflation risks, exchange-rate instability, geopolitical tensions, and the prospect of tighter financial conditions. The banks appear comfortable. Investors, however, are not yet fully convinced,” he said.

By Sanath Nanayakkare