Overview
Haycarb manufactures coconut-shell activated carbon for export markets and provides water and wastewater purification systems through Puritas. The June quarter showed a marked acceleration in sales and operating profit, with improved operating efficiency despite a weaker gross-margin record than in prior comparable June quarters.
Price performance
The share rose 37.5% over three months against a 3.9% fall in the ASPI, and gained 114.4% over one year while the ASPI rose 5.4%. The closing price was LKR 197.00 on 28 August 2026.
The price was at its 52-week high and recent volatility was above its own one-year norm, while 20-day trading volume was below the 60-day average. The sharp three-month move occurred without company news in the past 30 days, so the available news flow does not account for it.
Valuation
At 14.0 times earnings and 1.9 times book value, Haycarb trades above the manufacturing-sector median on both measures. The twelve-month return on equity was 13.6%, providing an earnings basis for the premium to book value.
The dividend yield is 2.2%. Dividend per share increased to LKR 4.07 in FY2026 from LKR 3.80 in FY2025, while the current payout ratio of 30.6% leaves earnings cover of 3.27 times.
News and sentiment
Direct coverage was normal over 90 days, with six material articles: four positive, none negative and two neutral. However, there were no company articles in the last 30 days, an unusually quiet period against Haycarb’s normal monthly coverage rate.
Company announcements included a BOI agreement for an US$18.18 million Energy Storage Carbon expansion and a first interim FY2027 dividend of LKR 0.75 per share, which went ex on 9 July 2026 and was paid on 22 July 2026.
Financials
June-quarter revenue and both operating and net profit increased year-on-year. Gross margin improved by 0.3 percentage points to 19.8%, operating margin widened by 4.5 points to 11.5%, and net margin increased by 1.4 points to 6.3%.
The gross and net margins nevertheless ranked among Haycarb’s weaker comparable June outcomes, at sixth of seven June quarters for each measure. Operating margin ranked a middling fourth of seven. Below-the-line items absorbed LKR 1.04 billion of operating profit, limiting the translation of stronger operations into net earnings.
Equity increased to LKR 34.95 billion at June 2026. The share count was unchanged year-on-year at 297.1 million, so the quarterly EPS improvement was not mechanically driven by a corporate action.
Risks
The principal risk is a much heavier debt burden alongside weak cash generation. Total debt reached LKR 19.14 billion at March 2026, equal to 62.1% of equity attributable to owners, while annual cash conversion was -0.8x.
Interest cover was 7.02 times and the current ratio was 1.74, indicating that near-term liquidity and finance-cost coverage remained adequate despite the balance-sheet expansion. Minority shareholders received 16.6% of annual group profit, so group profit exceeds the profit pool attributable to Haycarb shareholders.
Manufacturing conditions were expanding as at 31 August 2026, with the PMI at 55.0, but export-facing manufacturers also face evolving compliance and competitive conditions in overseas markets.
Outlook
As at 31 August 2026, the next scheduled catalyst is the September 2026 quarterly filing, expected between 11 November 2026 and 2 February 2027. It will replace the June-quarter figures and show whether the recent revenue and operating-profit improvement persisted while debt remained elevated.
As at that date, the data does not disclose the pace of spending, commissioning progress or commercial contribution from the Energy Storage Carbon expansion, so its earnings and cash-flow effect cannot be assessed from the available information.