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Chevron Lubricants Lanka Plc: research report

LLUBView stock page →
Fairly valuedbullishAug 6, 2026

LLUB’s June quarter was its most profitable June on record, with a 20.4% net margin, and it continues to pay a solid 5.9% dividend yield. The question is how much of this strength is already priced into its rich book multiple.

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Why bullish

  • Profitability stepped up: operating margin rose to 29.4% from 25.8% and net to 20.4%, the best June quarter on record.
  • Quality at a reasonable earnings multiple: ROE is 47.3% while P/E is 10.28 versus a sector median 12.65.
  • Income support: dividend yield is 5.9% with a 60.9% payout.

Against this. P/B is 4.93 (95th percentile in manufacturing), leaving less room for error.

Operating margin
29.4%sector 11.3%
from 24.0% a year earlier
Net margin
20.4%sector 6.3%
from 17.4% a year earlier, revenue +29.0%
Return on equity
47.9%
twelve months to Jun 30, 2026, unaudited
P/E
10.4sector 12.0
earnings Rs 19.72 per share
P/B
5.01sector 1.63
book Rs 41.14 per share
Dividend yield
5.83%sector 2.05%
60.9% of earnings paid out

Current figures, updated daily from filings to Jun 30, 2026. The report below was written on Aug 6, 2026. Sector figures are the median of 29 listed companies in the same sector.

Overview

Chevron Lubricants Lanka manufactures and markets lubricants across retail, OEM and industrial channels in Sri Lanka, with exports to the region. The most important change now is profitability: the June 2026 quarter delivered its best June-quarter net margin on record, and a Cabinet-awarded Sapugaskanda supply order adds some near-term volume visibility.

Price performance

LLUB has outpaced the market across all windows: up 23.1% over 1 year versus the ASPI’s 9.3%, and up 4.9% over 6 months versus -11.3%. Shorter windows are similar, with 1 month up 1.1% against -3.1%.

Valuation

On earnings LLUB screens inexpensive for its sector: P/E is 10.28, at the 27th percentile in manufacturing. On book it is rich, with a P/B at the 95th percentile, but a 47.3% ROE helps reconcile that premium. The dividend yield is 5.9%, also at the 95th percentile.

News and sentiment

Direct coverage is thin. Over the past 90 days there were 3 material articles, 2 positive. On 2026-06-03 the Cabinet approved lubricating oil purchases for Sapugaskanda, including LKR 434.86 million to LLUB. A third interim dividend of LKR 7 per share went ex on 2026-03-10 (FY2025).

Financials

Margins strengthened quarter-on-quarter: operating margin rose to 29.4% from 25.8%. Net margin rose to 20.4% from 18.5%, the best June quarter on record on a like-for-like company basis. Revenue was LKR 7.3 billion. Net profit was LKR 1.5 billion and the below-the-line drag (finance costs and tax) was LKR 654 million. Like-for-like year-on-year quarterly comparisons are not available due to basis differences, but for the full year 2025 the company posted profit growth with solid returns.

Risks

Valuation on book is demanding at a P/B of 4.93. Quarterly revenue softened sequentially, from LKR 8.1 billion to LKR 7.3 billion, which bears watching for demand volatility. As a lubricant marketer, earnings are inherently sensitive to imported base-oil costs and the rupee; macro conditions can move quickly.

Outlook

As at 2026-08-06 the next catalyst is the September 2026 quarter filing, expected between 2026-10-28 and 2027-01-28. Delivery that sustains the recent margin gains would underpin the current earnings-based valuation, while a slip would challenge it; the Sapugaskanda award should support volumes through 2026/27.

About this report. Generated on Aug 6, 2026 from market data up to Aug 6, 2026, 3 material news articles over 90 days and financials to Jun 30, 2026. Every figure is drawn from EquityLK's own data on this company. AI research can contain errors, so treat it as a starting point, not investment advice.