Overview
Bogawantalawa Tea Estates cultivates, processes and markets tea, while also developing palm oil, spices, forestry and timber. Its sustainability platform includes renewable energy and Climate Positive tea production.
The most important change is the strong June-quarter recovery in profitability. However, the audited year still recorded a decline in profit, leaving the investment case dependent on whether recent operating improvement is sustained.
Price performance
The share closed at LKR 70.00 on 2026-08-28. It gained 4.2% over one month, outperforming the ASPI's 0.6% rise, but fell 5.9% over three months against the index's 3.9% decline and lost 10.8% over one year while the ASPI gained 5.4%.
Price performance and operations disagree: the share fell 5.9% over three months even as operating margin rose 14.3 points in the latest quarter. The stock sits 28.5% up from its 52-week low and 22.0% below its high. Recent 60-day volatility was 54.9%, running 27.4% above its own one-year level, while 20-day volume was 140.3% above its 60-day average.
Valuation
Valuation is relatively inexpensive on earnings: the P/E of 6.49 ranks at the 10th sector percentile, while the P/B of 1.22 ranks at the 54th percentile. The audited return on owners' equity was 13.2%, which provides some support for a book multiple close to the sector middle rather than making it an obvious premium valuation.
The dividend yield is 8.6%, at the highest sector percentile. The payout direction is positive, with dividend per share rising from LKR 2.00 in FY2025 to LKR 6.00 in FY2026; the latest year's payments comprise two distributions, so the history should not be treated as a guaranteed recurring level.
News and sentiment
Coverage is thin: only one material company article appeared in the last 90 days, and it was positive. The article reported the LKR 4.50 second interim dividend, which went ex-dividend on 2026-08-14 and is payable on 2026-09-04.
Financials
The June 2026 quarter delivered revenue growth of 4.2%, while operating profit grew 99.6% and net profit grew 128.6%. Gross margin widened from 15.8% to 25.7%, operating margin from 15.6% to 29.9%, and net margin from 11.1% to 24.4%. Gross and net margins ranked 3rd of 6 among comparable June quarters, while operating margin ranked 4th of 12 across comparable company-basis quarters.
The improvement was mainly operating rather than a below-line benefit: the gap between operating and net profit was LKR 78 million in the latest quarter, compared with LKR 62 million a year earlier. Revenue was LKR 1.44 billion and net profit LKR 352 million. The latest quarter had 83.75 million shares outstanding, broadly unchanged from the year-ago quarter, so the EPS improvement was not driven by a share-count change.
The audited year to 2026-03-31 was weaker on the bottom line. Revenue grew 10.0% to LKR 5.67 billion, but net profit fell 45.5% to LKR 568 million, producing a 10.0% net margin. The twelve months to 2026-06-30 are newer than that audited filing and show revenue of LKR 5.72 billion, up 12.4%; no comparable twelve-month profit or margin is reported.
Risks
The largest risk is tea-market exposure. Sector data show January-July 2026 tea exports fell 4.9% and sector earnings declined by about USD 67 million as Middle East shipping disruption affected markets and average FOB prices fell to USD 5.70 per kilogram.
The balance sheet is comparatively light on debt, but cash conversion remains a watchpoint. At 2026-03-31, total debt was LKR 26 million, gearing was 0.6%, interest cover was 3.09 times, and the current ratio was 2.6. Cash conversion was 0.96 times, so annual operating profit was not fully matched by operating cash, although free cash flow was LKR 1.07 billion. No profit was attributable to minority shareholders, so reported group profit and owners' profit are aligned.
Outlook
The next company-specific event is the filing for the quarter ending 2026-09-30. As at 2026-08-29, it is expected between 2026-11-11 and 2027-02-02; that filing will show whether the June-quarter operating recovery continued after the latest reported period.
The confirmed second interim dividend is payable on 2026-09-04. Outside the company, falling Treasury bill and bond yields offer a more supportive financing backdrop, while tea export disruption remains the clearer operating headwind. The available data cannot establish whether the recent profit improvement is durable across the next filing.