Overview
ACL Cables is a leading Sri Lankan manufacturer of low-voltage, control and telecom cables, serving institutional projects and retail channels with integrated production and distribution. The latest quarter combined solid top-line and profit growth with a notable gross-margin squeeze, making margin repair the near-term swing factor.
Price performance
Over one year the share rose 79.2%, far ahead of the ASPI's 9.3%. Over the last month it fell 4.4% versus the index's 3.1%. Over three months it is down 5.9% versus 6.5%. A 1-for-3 share subdivision on 29 Dec 2025 restates history. The as-traded one-year return was -40.2%, a mechanical effect. Subdivisions are non-dilutive.
Valuation
At 10.4x P/E it screens cheaper than the manufacturing median 12.78x. P/B of 1.84 is near the 1.8 median. ROE for FY2025 was 14.9%. The dividend yield is 0.5% against a 3.4% sector median. Payout is 5.5%, with 18.3x cover. Within sector percentiles it sits at the 32nd for P/E and 64th for P/B. It is at the 14th percentile for dividend yield.
News and sentiment
Coverage was normal, with 8 material items in the last 90 days. The split was 2 positive, 4 negative and 2 neutral. Key items were ACL Cables’ inclusion in the S&P SL20 effective 22 June and board committee changes disclosed on 18 and 19 March. One article referenced “ACL” in JAT Holdings’ Bangladesh unit; it does not relate to ACL Cables. Confirmed actions include a 1-for-3 split ex 29 Dec 2025. A first interim dividend went ex 26 Sep 2025 at LKR 0.50 per today’s shares. It was paid on 16 Oct.
Financials
March quarter (group) revenue was LKR 12.2 billion and net profit LKR 1.8 billion. Gross margin was 18.6% versus 26.3% a year ago. Operating margin was 18.2% versus 19.4%. Net margin was 15.1% versus 15.5%. Against its own March history these margins were middling, though the gross margin was the worst of the last 12 quarters on record. The below-the-line drag was LKR 376 million. Total equity stood at LKR 43.2 billion at March. For FY2025, ACL delivered LKR 37.5 billion in revenue and LKR 5.4 billion in net profit, and ROE was 14.9%. A 1-for-3 share split on 29 Dec 2025 tripled the share count, so post-split per-share figures are mechanically lower; judge performance on the absolute amounts given here.
Risks
Input-cost and mix pressure is evident, with gross margin at 18.6%. News flow has skewed cautious, with 4 of 8 items negative. A low dividend yield of 0.5% leaves less income support if earnings soften. Sector-wide shifts in trade policy and the currency can affect raw-material procurement and project timing; these are external and hard to forecast.
Outlook
As at 6 Aug 2026 the next numbers are the June 2026 quarter. They are due by 28 Oct 2026. That filing will show whether margins start to recover from March’s softness and whether the revenue step-up above LKR 12 billion is being sustained. With T-bill yields easing over the past fortnight, finance costs could also begin to moderate, but the filing will carry the answer.