Overview
Dilmah Ceylon Tea Company PLC is a global Ceylon tea brand selling tea bags, packets, specialty and wellness infusions, extracts and ready-to-drink formats across 100+ markets. The key picture is mixed: a strong full-year rebound, but a soft March quarter.
Price performance
As of 2026-08-07 the shares closed at LKR 1460. The stock outperformed the market over 6 months (20.2% vs ASPI -10.6%) and 1 year (25.8% vs 9.5%). It sits mid-range in its 52-week band (range position 47%). Recent volatility is quieter than its own year, with the last 60 days running 48.1% lower than its 1-year norm.
Valuation
CTEA trades at 18.1x TTM earnings, above the sector median 12.37x (high at the 78th percentile), and at 1.24x book. ROE is 7.8%. The dividend yield is 1.7%, with the payout rising from LKR 18 per share in FY2024 to LKR 25 in FY2026.
News and sentiment
Coverage over 90 days was normal with 3 material articles (2 positive, 1 negative). A first and final dividend of LKR 25 per share went ex on 2026-08-07. Separately, an article flagged Middle East shipping disruptions and noted Dilmah’s pivot to diversify markets; about 30% of sales come from the Middle East.
Financials
Latest quarter (March 2026) mixed: gross margin was 37.8% vs 36.5% a year ago, while net margin slipped to -1.4% from 6.5%. Operating margin was not disclosed for the quarter. Revenue grew 10.1% year-on-year.
For FY2026, the rebound is clear: net profit reached LKR 1.89 billion, up 160.8% year-on-year. Full-year operating and net margins were 10.1% and 8.6% respectively.
Risks
The primary risk is geographic concentration: about 30% of sales are to the Middle East, where logistics have been disrupted. Profitability is also volatile quarter to quarter, with the March 2026 net margin at -1.4%.
Cost pressures are a backdrop risk: July inflation was 7.3% and fuel prices reportedly jumped 47%, a drag on logistics for FMCG exporters.
Mitigants: the balance sheet is strong with net cash of about LKR 3.24 billion and interest cover of 15.0x, supporting resilience.
Outlook
As at 2026-08-07, the next filing (period end 2026-06-30) is due now and expected by 2026-10-26; it will show whether the March dip was transitory. The LKR 25 per share dividend is scheduled for payment on 2026-08-28. Near term, watch shipment flows and costs on export routes while tracking revenue momentum outside conflict-affected markets.