Overview
ACL Plastics manufactures cable-grade PVC compounds for domestic and international cable and electrical customers. The latest quarter showed a broad improvement in profitability: June gross, operating and net margins were each the strongest June readings in the company's comparable group-basis history, while net profit growth materially exceeded revenue growth.
Price performance
The share closed at LKR 142.00 on 14 August 2026. It fell 5.3% over three months and 17.1% over six months, broadly matching the ASPI's 5.6% three-month fall but lagging its 9.2% six-month decline less severely; over one year, APLA rose 89.7% against the ASPI's 9.3% gain. Nothing in the thin company news flow explains the recent weakness.
The price sits 28.8% below its 52-week high and 92.9% above its low, placing it at 54.3% of that range. Recent volatility was 32.0%, 37.0% below its own one-year level, while 20-day volume was 31.2% below its 60-day average. A 1:10 share subdivision took effect on 29 December 2025, so adjusted returns are the appropriate measure across that period.
Valuation
APLA trades on 7.32 times earnings and 1.27 times book value, versus manufacturing-sector medians of 12.45 and 1.68. Those multiples rank at the 9th and 32nd sector percentiles respectively, making earnings valuation the clearer discount. Twelve-month ROE to 30 June 2026 was 19.8%, supporting a valuation above book without requiring an unusually high multiple.
The dividend yield is 2.6%, below the sector's 3.2% median and at the 40th percentile. However, the payout direction is positive: dividend per share increased from LKR 2.00 in FY2024 to LKR 2.50 in FY2025 and LKR 3.75 in FY2026. The latest dividend already went ex on 12 August 2026, with payment due on 2 September 2026.
News and sentiment
Direct coverage is thin: only one material article appeared in the last 90 days, and it was positive. The article reported the LKR 3.75 first interim dividend, which went ex on 12 August 2026 and is payable on 2 September 2026; no negative or neutral company articles were recorded.
Financials
For the quarter ended 30 June 2026, revenue rose 5.0% year-on-year to LKR 739 million, while operating profit grew 25.4% to LKR 246 million and net profit grew 64.8% to LKR 295 million. Gross margin widened from 28.1% to 34.0%, operating margin from 27.9% to 33.3%, and net margin from 25.4% to 39.9%. Each latest margin was the best June result in seven comparable group-basis quarters.
The profit increase was stronger below the operating line: below-line items added LKR 49 million to the quarter's result, rather than reducing it. This means the exceptional net-profit growth was not solely an operating outcome. The twelve months to 30 June 2026 nevertheless show revenue growth of 10.2% and a 32.2% net margin, while the latest audited year to 31 March 2025 delivered 12.7% ROE.
Group equity was LKR 4.71 billion at June 2026, versus LKR 3.87 billion a year earlier. Shares outstanding increased from 4.21 million to 42.13 million after the 1:10 subdivision on 29 December 2025, so the apparent fall in reported EPS from LKR 42.44 to LKR 6.99 is mechanical rather than an operating decline.
Risks
The principal measurable risk is that the latest profit strength includes a LKR 49 million below-line benefit, which may not repeat. June operating cash flow was negative at LKR 195 million, although interim cash flow cannot be compared directly with quarterly profit; the latest annual cash conversion was 1.88 times, showing that the audited year's operating profit was cash-backed.
The balance sheet provides substantial protection: gearing was 0.0% of owners' equity, interest cover was 1,629 times and the current ratio was 19.1 at 31 March 2025. Free cash flow was LKR 1.15 billion, so funding stress is not evident in the latest annual data. The operating exposure remains concentrated in manufacturing and cable-related demand, while the wider sector faces labour shortages. Energy-driven inflation at 7.3% is an additional input-cost risk, though the company data does not quantify its direct effect.
Outlook
As at 16 August 2026, the next substantive company event is the filing for the quarter ending 30 September 2026. Exchange timing places it between 7 November 2026 and 7 January 2027, and it will replace the June-based figures used here. The key information gap is whether the June margin and below-line contribution are sustained in that filing; the current data cannot establish that.
The confirmed LKR 3.75 dividend payment is due on 2 September 2026. Lower Sri Lankan interest-rate expectations and stronger manufacturing exports are supportive external conditions, while elevated energy inflation and reported labour shortages remain counterweights. These developments describe the operating environment, not company-specific outcomes.