Overview
ACL Cables manufactures and distributes electrical cables, conductors and related electrical products for institutional, retail and export markets. The latest quarter combined stronger sales and higher net profit with a clear weakening in core operating profitability, making margin recovery the central issue rather than demand growth alone.
Price performance
At LKR 92.60 on 28 September 2026, ACL was down 8.2% over three months, compared with a 6.5% fall in the ASPI, but remained up 49.5% over one year against the index's 1.6% gain. The 2025 1:3 split changed the share basis, so reported returns have been restated and cannot be read alongside unadjusted screen-price returns as separate performance measures.
The share sits 13.4% below its 52-week high and 68.8% up its annual range from the low. Sixty-day volatility was 44.4% below its own one-year norm, showing that recent trading has been quieter than this share's usual pace.
The record since October 2023 shows two falls of 15% or more in three years, the deepest 23%, which has not yet recovered. Median daily turnover was LKR 11.1 million; a LKR 1 million order is about 9.0% of what trades on a typical day, a noticeable part of a day's trading.
Valuation
At 10.5 times P/E, the market price is LKR 10.50 for every LKR 1 of trailing profit, placing ACL at the 32nd percentile of manufacturing peers by P/E. Its P/B of 1.71 means LKR 1.71 is paid for each LKR 1 of net assets, while trailing return on equity was 17.5%; that profitability helps explain a book multiple around the sector median rather than making it a warning on its own.
The valuation is high against ACL's own record: the P/B is more expensive than 86% of days since January 2019 and the P/E is more expensive than 82% of days since January 2019. A buyer at this price relies on a latest quarter that supplied 27.1% of trailing EPS, although using that quarter's year-ago net margin would leave the P/E almost unchanged at 10.4.
The 0.5% dividend yield is modest beside the sector, but the per-share payout has risen from LKR 0.417 in FY2024 to LKR 0.60 in FY2026. The market-wide valuation score of 46 out of 100 places the share in the fairly valued band.
News and sentiment
Direct coverage was normal over the past 90 days, with 11 material articles classified as seven positive, one negative and three neutral. The relevant company developments were ACL's addition to the S&P SL20 effective 22 June and the LKR 0.60 first interim dividend disclosed on 28 September, with an ex-date of 7 October.
Trading was halted pending disclosure on 28 September and was stated to resume on 29 September after the disclosure was published. An August article concerning JAT Holdings' Bangladesh subsidiary, also called ACL, does not concern ACL Cables and should not be treated as company news.
Financials
June-quarter revenue rose 16.6% year-on-year to LKR 11.5 billion, while net profit increased 13.7% to LKR 2.1 billion. Gross margin fell from 29.7% to 24.2%, operating margin from 22.5% to 16.9%, and net margin from 19.0% to 18.5%. This means the larger sales base produced less operating profit per rupee of cable sales, even though the final profit still rose.
Operating profit fell 12.7%, whereas net profit rose because below-the-line items shifted from a LKR 349.0 million drag to a LKR 188.8 million contribution. The June net margin ranks third of seven comparable June quarters, but gross and operating margins are both middling at fourth of seven, so the final profit was stronger than the underlying manufacturing margin trend.
Total equity reached LKR 45.3 billion from LKR 37.6 billion a year earlier. Shares outstanding are now 718.7 million following the 1:3 split in December 2025; the split mechanically changed per-share figures but did not change the group's absolute earnings or equity. Minority shareholders received 12.9% of audited FY2026 group profit, so group net profit is not wholly attributable to the ordinary shares being valued.
Risks
The principal financial-quality risk is cash conversion rather than debt. In audited FY2026, operating cash flow covered only 0.16 times operating profit, meaning much of reported operating profit had not arrived as cash during that year; free cash flow was still positive at LKR 1.1 billion.
Balance-sheet strain appears limited: total debt was LKR 1.3 billion, gearing was 3.6% of owners' equity, and operating profit covered the interest bill 34.4 times. The current ratio was 7.29 times, meaning short-term assets, including inventories and customer receivables, substantially exceeded bills due within a year.
ACL operates wholly in manufacturing exposure. As at 28 September, the sector backdrop included elevated oil and transport-cost uncertainty and weakening August merchandise exports, which are external conditions rather than evidence of an effect on ACL itself.
Outlook
The next company-specific test is the September 2026 interim quarter, expected between 6 and 14 November 2026. It will supersede the June filing and show whether revenue growth continues alongside the lower operating margin seen in the latest quarter.
As at 28 September, the confirmed LKR 0.60 first interim dividend goes ex-dividend on 7 October and is payable on 26 October. Only a buyer before the ex-date receives that distribution; the available data cannot establish the profitability of the September quarter before it is filed.