Overview
Haycarb manufactures coconut-shell activated carbon for export markets, alongside water and wastewater treatment solutions through Puritas. The June quarter marked a sharp operating recovery, with sales growth and improved conversion of revenue into operating profit, although cash generation and a more debt-heavy funding structure remain important constraints.
Price performance
The share closed at LKR 216.00 on 3 September 2026 after rising 38.3% over three months, against a 3.5% decline in the ASPI. The move occurred without company-specific news in the past 30 days, so the available filings and news flow do not establish its cause.
The close was at the 52-week high, placing the share at 100.0% of its annual range. Sixty-day volatility was 1.1% above Haycarb's own one-year norm, while 20-day trading volume was 9.5% above its 60-day average.
Valuation
At 15.2x P/E and 2.07x P/B, Haycarb sits at the 64th percentile of manufacturing peers on both measures. Its 12.3% return on equity provides some support for the above-median P/B rather than making that premium a standalone concern.
The dividend yield is 2.0%, below the manufacturing median. The FY2026 dividend per share increased from FY2025, but the yield remains a secondary part of the valuation case.
News and sentiment
Coverage was constructive but limited: six material articles included four positive, no negative and two neutral items. No company article appeared in the past 30 days versus Haycarb's usual monthly baseline of one, making current coverage unusually quiet.
The principal company development was the BOI agreement for an energy-storage carbon expansion. The first FY2027 interim dividend went ex on 9 July 2026 and was paid on 22 July 2026.
Financials
June-quarter revenue, operating profit and net profit all increased year-on-year. Gross margin was 19.8% versus 19.5%, operating margin was 11.5% versus 7.0%, and net margin was 6.3% versus 4.9%.
Despite the margin recovery, gross and net margins were among the weaker outcomes in Haycarb's comparable June-quarter record, while operating margin was mid-record. Finance costs, tax and other below-the-line items continued to absorb a substantial share of operating profit. Owners' equity rose year-on-year, with no reported change in shares outstanding; minority interests also receive a material share of group profit.
Risks
The largest financial risk is the increased debt load. FY2026 debt was LKR 18.2 billion and gearing reached 62.1% of owners' equity, up from 22.3% a year earlier. Interest cover was 7.02x, which remains adequate but gives less balance-sheet flexibility than before.
Liquidity was supported by a 1.74x current ratio, but operating cash conversion was -0.8x in FY2026. Reported profit therefore did not translate into operating cash flow, while free cash flow was also negative. Manufacturing export conditions were mixed as at 4 September 2026, with July merchandise exports down and domestic fuel costs rising.
Outlook
As at 4 September 2026, the next reported catalyst is the September-quarter filing, expected between 12 November 2026 and 2 March 2027. It will show whether the June operating recovery is continuing while debt and working-capital demands remain elevated.
The BOI-backed energy-storage carbon expansion is another material strategic development, but the supplied data does not disclose its financial contribution or timing of earnings. The filing will also provide the next evidence on whether profit is converting into cash.