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Import substitution boosts profitability for Royal Ceramics

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New players expected to enter the lucrative industry with more than Rs. 15 billion worth investments

by Sanath Nanayakkare

According to a valuation note released by First Capital Research, Royal Ceramics (RCL group), the dominant local player in tile and sanitaryware products has turned out be a key beneficiary following the import restrictions employed by the government, which resulted in a complete import ban on all tile and sanitaryware products.

As a result, RCL’s pre-Covid 52% market share had surged across all segments to 75% in floor tiles and 82% in wall tiles.

RCL earnings growth had surged over 100% to reach Rs. 2 bn for the third quarter of financial year 2021 (3QFY21), compared to the Rs. 1 bn in 3QFY20 with 9MFY21 earnings expanding by 72% to Rs. 3.3bn.

Profitability was mainly supported by the surge in gross profit margins, reduction in finance cost and increased contribution from Group\s associate profits, FC Research stated.

“RCL’s gross profit margins for the quarter was enlarged by 236bpsYoY to 39% amidst strong growth in volume and economies of scale supported by higher capacity utilization nearing 100%.”

“Meanwhile, RCL’s EBIT (operating earnings over operating sales margin). and net profit margins jumped 424bps and 691bps respectively”.

“RCL plans to increase tile and bath ware capacity by 10% expansion in the existing plants while also building a new plant in order to further expand overall capacity by 20% during FY22E. New tile manufacturing plant is expected to target more price sensitive segment of the market,” the note added.

“The ceramic industry is expecting more than Rs. 15 bn in new investments, expanding industry production capacity with potential new players likely to enter the lucrative industry increasing competition over the next few years,”

“We expect RCL to maintain profitability of Rs. 4.5bn-5.0 bn in the next few years,” FC Research said.

 

 



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Ceylinco Life agent among three global finalists for award

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Ceylinco Life’s Ambalantota branch agent AIP Manjula

Ceylinco Life’s Ambalantota branch agent AIP Manjula has been named one of three global finalists for the prestigious Insurance Agent of the Year award at the 11th Asia Trusted Life Agents & Advisers Awards (ATLAA) 2026.

The recognition places a Sri Lankan insurance professional among the finalists in a regional field spanning South Asia, Southeast Asia, East Asia and the wider Asia-Pacific region.

Ceylinco Life said the achievement reflected the calibre and customer-focused approach of its agency force, while recognising Manjula’s professionalism and commitment to policyholders.

The award evaluates insurance agents on criteria extending beyond sales performance, including ethical conduct, client service, policy persistency, digital adoption, innovative practices and contributions to the insurance industry and community.

The awards are organised by Asia Advisers Network and Asia Insurance Review, with LIMRA as co-organiser. An independent judging and balloting process is monitored by KPMG as the official scrutineer. The judging panel comprises senior insurance executives, association presidents and industry experts from across the Asia-Pacific region.

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CEAT Kelani retains AA+ rating for sixth year

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CEAT Kelani Holdings (CKH) has retained its National Long-Term Rating of ‘AA+(lka)’ with a Stable Outlook from Fitch Ratings for the sixth consecutive year, reflecting the company’s financial resilience and leading position in Sri Lanka’s pneumatic tyre market.

The ‘AA+(lka)’ rating, the second-highest on Fitch’s national scale, indicates a very strong capacity to meet financial commitments.

Fitch said CKH’s established market leadership and resilient financial profile remained key strengths, while noting its exposure to price-sensitive, cyclical and highly competitive markets.

The Stable Outlook reflects expectations that the company will maintain its market position despite rising input costs and increasing competition from imported tyres, while preserving adequate credit metrics during periods of weaker earnings and higher investment.

Fitch expects CKH’s established brand, extensive dealer network and adaptive pricing strategies to support its market position. Planned production facility upgrades are also expected to improve product quality, particularly in the radial tyre segment.

The rating agency expects near-term pressure on margins from higher raw material and energy costs but said the company’s low leverage and sound liquidity would provide a cushion.

CKH Chairman Chanaka De Silva said the rating reinforced the company’s focus on disciplined financial management, operational adaptability and long-term investment.

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Commercial Bank leads nationwide aquatic clean-up drive

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Sanath Manatunge, Managing Director/CEO of Commercial Bank and some of the Bank’s staff participating in the coastal cleanup programme

Commercial Bank of Ceylon mobilised employees, customers, volunteers and community members for a nationwide coastal and aquatic clean-up campaign across 20 locations on September 19 to mark International Coastal Cleanup Day 2026.

Conducted under the bank’s sustainability platform, themed ‘Forward Together for a Cleaner Future’, the initiative covered 16 coastal locations and four inland waterways, bringing together stakeholders for a coordinated environmental conservation effort.

The flagship programme was held at Mount Lavinia Beach, with additional activities at Wellawatte and Galle Face beaches. Similar initiatives were conducted by the bank’s regional offices at locations including Kalutara, Negombo, Trincomalee, Batticaloa, Puttalam, Jaffna, Galle, Dondra, Tangalle and along the Mahaweli River.

Employees, management, Future Force volunteers, customers and their families participated alongside the Marine Environment Protection Authority (MEPA), United Nations Global Compact Network Sri Lanka, government and local authorities, environmental organisations and community members.

The bank said the initiative reflected its commitment to water stewardship after adopting Sustainable Development Goal 6 — Clean Water and Sanitation — as a priority goal in 2025.

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