Overview
Hemas Holdings is a diversified group anchored in consumer brands and healthcare, with mobility, leisure and logistics alongside. The most important change is execution quality in FY26: the Mar-26 quarter delivered record profitability, with gross, operating and net margins printing at or near the top of the company’s history. Healthcare remained the largest contributor, and governance depth increased with Sabrina Esufally’s appointment to the Group Board on 1 July 2026.
Price performance
Price action has been steady to soft versus the market. The share was flat with the ASPI over 1 week (both +0.6%), lagged slightly over 1 month (-3.4% vs -3.1%), outperformed over 3 months (-3.4% vs -6.5%) and 6 months (-9.4% vs -11.3%), but trailed over 1 year (+2.9% vs +9.3%). Trading sits within a 52-week range of LKR 28.00 to LKR 36.50.
Valuation
HHL screens inexpensive on earnings and supportive on income. The P/E is 6.97 and sits at the sector floor (0th percentile). The dividend yield is 5.5% (82nd percentile). The P/B is 1.68, higher on this metric than many peers, while ROE of 15.7% and a moderate payout ratio of 38.2% suggest the balance between reinvestment and returns remains healthy.
News and sentiment
Coverage over 90 days has been net positive (15 material articles: 9 positive, 5 negative, 1 neutral), but the last 30 days were unusually quiet with zero articles versus a 1.7-per-month baseline. Governance and capital updates dominated: Sabrina Esufally joined the Board effective 1 July 2026; a final dividend of LKR 0.75 per share went ex on 30 June 2026 and paid on 17 July; and the company proposed an ESOS of up to 33.5 million shares (1.12% of issued), subject to approvals. Separately, the EPF disclosed a 2025 purchase of 40 million HHL shares, indicating institutional interest.
Financials
Quarter to Mar-26 improved across the P&L. Gross margin was 34.5% vs 30.7% a year ago; operating margin was 13.8% vs 12.6%; and net margin was 9.9% vs 8.7%. On rank, net margin was the best March quarter in eight years and the best of the last 12 quarters, and gross margin was also the best of 12. Operating profit growth outpaced revenue while below-the-line items remained a material but broadly stable drag. For FY26, profitability improved year-on-year with revenue and net profit growth supported by disciplined execution.
Risks
Top-line deceleration is visible, with Mar-26 revenue growth of 3.9% YoY. Below-the-line charges remain sizeable, keeping a gap between operating and net outcomes. An ESOS of up to 1.12% is prospective dilution. Macro and sector backdrops bring moving parts: July inflation rose to 7.3%, fuel costs were volatile, and a new 10% US tariff regime for exporters raises planning complexity; in healthcare, policy shifts around pharma manufacturing and procurement could alter competitive dynamics. Execution risk around planned reinvestment and acquisitions also bears watching.
Outlook
As at 6 Aug 2026, the next catalyst is the June 2026 quarter result, due by 28 Oct 2026. That print will show whether March’s margin step-up is being sustained into FY27 and whether below-the-line pressures are easing. Board-level changes and the proposed ESOS have no set additional dates disclosed as at this report.