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Ceylon Hospitals Plc: research report

Moderately undervaluedneutralAug 14, 2026

Ceylon Hospitals delivered 44.9% annual net-profit growth, but the latest quarter showed weaker operating profit. The key tension is improving earnings against softer operating momentum.

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Why balanced

  • Annual net profit grew 44.9% to LKR 1.05 billion, indicating a stronger earnings base.
  • At LKR 64.9, the voting share trades at a P/E of 11.43, broadly aligned with healthcare valuations.
  • The share gained 66.1% over one year despite remaining below its 52-week high.

Against this. Latest-quarter operating profit fell LKR 30 million year-on-year, while operating margin narrowed to 14.3% from 16.6%.

Operating margin
14.3%sector 14.5%
from 16.6% a year earlier
Net margin
10.8%sector 10.9%
from 11.2% a year earlier, revenue +8.5%
Return on equity
8.1%
twelve months to Jun 30, 2026, unaudited
P/E
10.7sector 10.8
earnings Rs 5.68 per share
P/B
0.85sector 1.41
book Rs 71.56 per share
Dividend yield
1.80%sector 0.00%
19.4% of earnings paid out

Current figures, updated daily from filings to Jun 30, 2026. The report below was written on Aug 14, 2026. Sector figures are the median of 6 listed companies in the same sector.

Overview

Ceylon Hospitals operates the Durdans hospital, an islandwide diagnostics and laboratory network, and supporting healthcare education and biotechnology businesses. The latest earnings record shows a profitable group with strong annual growth, but the most recent quarter points to pressure below the revenue line and weaker operating leverage.

Price performance

The price sits at 47.0% of its 52-week range, or 31.6% below the high and 69.1% above the low. Recent volatility was 43.6% below its own one-year level, while 20-day volume was 3.2% below its 60-day average, indicating quieter trading rather than a broad-based loss of interest.

Valuation

The dividend yield is 1.7%. The payout has increased from LKR 1.0 per share in FY2025 to LKR 1.1 in FY2026, following LKR 0.5 in FY2024, so the recent direction is upward even though the yield remains below the sector median.

News and sentiment

Direct coverage is thin: only one material company article appeared in the 90-day window, and it was positive. The article reported the LKR 1.1 first interim dividend, which went ex on 2026-06-01 and was payable on 2026-06-18. The 1:4 share subdivision also went ex on 2026-03-05.

Financials

The twelve months to 2026-06-30 produced revenue of LKR 11.21 billion, up 9.3%, while the audited year ended 2026-03-31 recorded revenue growth of 12.6% and net-profit growth of 44.9%. Equity attributable to owners reached LKR 11.99 billion, and the share count was 167.59 million after the 1:4 subdivision on 2026-03-05. Per-share comparisons around the action are therefore mechanical and should not be read as operating trends.

Risks

The balance sheet is not highly leveraged, with gearing at 11.2% of owners' equity and interest cover of 8.07 times at 2026-03-31. Liquidity was adequate at a 1.47 current ratio, but 9.6% of annual group profit belonged to minority shareholders, meaning group net profit is not identical to the earnings attributable to the shares being valued. Healthcare operators also face governance and cybersecurity exposure, while the sector's pharmaceutical policy initiatives have not yet produced a reported material operating change.

Outlook

Easier interest-rate conditions in Sri Lanka could reduce financing pressure across healthcare operators, but the company-specific data cannot establish how much of any future earnings change would come from operating performance, finance costs or other below-the-line items. With limited direct news coverage, the next filing carries greater informational weight.

About this report. Generated on Aug 14, 2026 from market data up to Aug 14, 2026, 1 material news articles over 90 days and financials to Jun 30, 2026. Every figure is drawn from EquityLK's own data on this company. AI research can contain errors, so treat it as a starting point, not investment advice.

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