Overview
Hayleys is a diversified group spanning consumer and retail, logistics, export-oriented operations, agriculture, renewable energy and hospitality. Its June quarter marked a substantial acceleration in sales and profit, led in reported news by transportation and logistics, consumer and retail, and export businesses.
The completed rights issue added equity capital, but the group remains a leveraged conglomerate whose earnings are spread across businesses with different economic and cost exposures.
Price performance
At LKR 224 on 17 September 2026, the share was up 28.8% over one year against a 0.1% ASPI gain, while its 3-month decline of 3.7% was smaller than the index's 6.0% fall. The price sat 72.3% of the way from its 52-week low to high, so it remained nearer the top of its own annual range than the bottom.
Recent trading has been quieter than Hayleys' own prior year, with both volatility and volume below their respective norms. The three-year record contains three falls of 15% or more, the deepest 25%, which took eight months to recover; these are records of material past retreats rather than price levels.
Median daily turnover was LKR 9.8 million over 60 sessions. A LKR 1 million order is about 10% of what trades on a typical day, a noticeable part of a day's trading.
Valuation
At 12.0 times trailing earnings, the share price represents 12 rupees paid for every rupee of last-twelve-month profit, below the diversified-holdings median of 14.31 times. Its P/B of 1.51 means paying LKR 1.51 for each rupee of net assets, above the peer median of 1.19, while trailing ROE of 13.7% helps explain why it trades above sector book value.
The company is more expensive than 67% of days since January 2019 on P/E and more expensive than 82% of days since January 2019 on P/B. This leaves the price cheaper than sector earnings multiples but elevated against Hayleys' own longer trading record.
The 2.7% dividend yield is below the sector median of 2.9%. The payout has held at LKR 5.99 per share in each of the last two financial years, after LKR 5.34 in FY2024, and trailing earnings covered the payout 3.12 times.
A buyer at this price relies partly on the latest quarter, which supplied 21.5% of trailing EPS. If that quarter had earned its year-ago net margin, the same price would stand on 12.7 times earnings rather than 12.0 times.
News and sentiment
Direct coverage was about normal, with six articles in the last 30 days against a monthly baseline of 5.5. Across 90 days, 19 of 28 material articles were positive, five negative and four neutral, with reported strong June-quarter results and international ratings featuring prominently.
Reported on 22 July, subsidiary Sri Lanka Shipping Company secured a USD 17.16 million, five-year tug-vessel lease contract. The contract adds identified logistics revenue, but disclosed terms do not establish its profit contribution relative to the group. Hayleys Solar also commissioned a 3MW project reported on 15 September, the first project in a planned 300MW portfolio; its earnings contribution was not disclosed.
The rights issue went ex on 18 March 2026 at LKR 200, a 2.4% discount to the preceding close. The LKR 6.00 interim dividend went ex on 30 January 2026, so a buyer today does not receive it.
Financials
June-quarter revenue rose 37.3% year-on-year to LKR 179.3 billion, while operating profit rose 58.0% and net profit rose 86.4% to LKR 5.9 billion. The profit a share is a claim on therefore expanded sharply in absolute terms, although the group structure means not all consolidated profit belongs to ordinary shareholders.
Gross margin was 22.3% versus 23.0% a year earlier, operating margin was 7.8% versus 6.8%, and net margin was 3.3% versus 2.4%. June has been Hayleys' weakest quarter for net margin on average over the five complete years on record, so the lower sequential profitability is not by itself a deterioration. Against comparable June quarters, gross margin was the worst of eight, while operating and net margins were middling at fourth and third respectively.
LKR 8.1 billion was absorbed between operating and net profit through finance costs, tax, associates and other below-operating items, limiting how much of operating earnings became profit. Owners' equity rose to LKR 117.9 billion from LKR 95.4 billion a year earlier, while shares outstanding rose from 750 million to 795 million after the rights issue; per-share comparisons need that larger share count in view.
Risks
Leverage is the principal risk. At the latest audited year, debt was LKR 289.7 billion and gearing, meaning debt against owners' equity, was 255.8%. Operating profit covered the interest bill 2.48 times, leaving a comparatively narrow cushion if earnings weaken or funding costs rise.
The current ratio was 1.19 times, meaning the group had LKR 1.19 of assets expected to turn into cash within a year, including inventories and customer receivables, for every LKR 1 of bills due in that year. Cash conversion was negative 0.35 times and free cash flow was negative LKR 47.8 billion, so audited operating profit did not arrive as cash. Minority shareholders received 36.8% of group profit, meaning consolidated profit is materially larger than the earnings attributable to the shares being valued.
Manufacturing accounts for 40% of reported segment revenue and faces higher procurement and energy costs alongside tariff uncertainty. Consumer retail, at 34%, faces softer purchasing power, while logistics, at 26%, faces fuel-cost risk; these are sector conditions rather than reported Hayleys outcomes.
Outlook
As at 17 September 2026, the next scheduled evidence is the interim quarter ending 30 September 2026, expected to be filed between 6 and 14 November. It will replace the June-quarter evidence and show whether the reported sales and operating-profit expansion extended beyond the first quarter.
The reported tug lease and solar projects establish additional operating activity, but the available data does not disclose their profit contribution. Nor does it show how higher energy costs, rising yields or currency weakness have affected Hayleys specifically.