All analyses
AI analysis

On'ally Holdings PLC: research report

UndervaluedneutralSep 3, 2026

June-quarter revenue rose 57.7% year-on-year, while net margin was the weakest of seven comparable June quarters.

Reports without a focus are public, one per stock per day. Generation usually takes about 15 minutes, and we'll notify you when it's ready.

Why balanced

  • June-quarter revenue increased 57.7% year-on-year and operating profit rose 60.6%.
  • The P/E of 3.46 is at the 0th percentile among reported sector peers.
  • The dividend yield is 5.2%, with FY2026 dividends rising to LKR 2.4 per share.

Against this. June net margin of 40.2% was the worst among seven comparable June quarters.

Operating margin
58.0%sector 13.6%
from 56.9% a year earlier
Net margin
40.2%sector 10.9%
from 40.7% a year earlier, revenue +57.7%
Return on equity
26.2%
twelve months to Jun 30, 2026, unaudited
P/E
3.2sector 10.2
earnings Rs 13.37 per share
P/B
0.85sector 1.09
book Rs 50.84 per share
Dividend yield
5.53%sector 2.39%
18.0% of earnings paid out

Current figures, updated daily from filings to Jun 30, 2026. The report below was written on Sep 3, 2026. Sector figures are the median of 32 listed companies in the same sector.

Overview

On'ally owns and leases Unity Plaza, combining IT-focused retail space with commercial offices in Colombo. The June 2026 quarter showed a marked acceleration in rental and operating profit growth, but its net-profit quality was less favourable than the operating result alone suggests.

Price performance

The share fell 5.1% over three months, underperforming the ASPI's 3.5% decline over the same period. The closing price was LKR 46.40 on 3 September 2026.

At 51.8% of its 52-week range, the price sat near the middle of its own range. Sixty-day volatility was 10.9% below its one-year norm, while 20-day trading volume was 56.0% below the preceding 60-day average, indicating quieter recent trading.

Valuation

At a P/E of 3.46, On'ally ranks at the 0th percentile of peers with reported earnings multiples in property and construction. Its P/B of 0.913 sits below book value, while the audited FY2026 ROE was 25.7%, making the discount to book more notable than a low-return asset valuation.

The 5.2% dividend yield is above most sector peers. The payout record rose from LKR 1.6 per share in FY2025 to LKR 2.4 in FY2026, although the latest earnings base includes substantial non-operating income.

News and sentiment

Coverage was normal rather than unusually intense, with six material articles in the past 90 days: two positive and four neutral. The principal development was Lanka Realty Investments' transfer of its 50.88% holding in On'ally to fellow group company Lee Hedges for about LKR 2.26 billion, shifting the controlling investment within the wider group.

A final FY2026 dividend of LKR 1.40 per share went ex on 21 August 2026 and is due for payment on 11 September 2026.

Financials

June-quarter revenue rose 57.7% year-on-year to LKR 146 million, while operating profit and net profit also increased. Gross margin is not available in the filings. Operating margin widened from 56.9% to 58.0%, a middling fourth rank among seven comparable June quarters.

Net margin eased from 40.6% to 40.2% and ranked last among the seven comparable June periods. The LKR 26 million gap between operating and net profit shows that finance costs, tax and other below-operating items again reduced earnings. The quarter was filed on a company basis and is comparable with June 2025.

Equity rose to LKR 4.73 billion from the prior-year June level, while the latest annual filing recorded roughly 93 million shares outstanding, broadly unchanged year-on-year. The audited year to March 2026 is historical relative to the June interim filing, and its unusually high net profit should not be treated as the current quarterly run-rate.

Risks

The main financial risk is cash conversion: operating cash flow covered only 0.92 times operating profit in the audited year to March 2026, down from 1.13 times a year earlier. This means reported operating profit was not fully realised in cash over that year.

Liquidity appears adequate, with a current ratio of 1.98, but total debt, gearing and interest cover are not disclosed in the available data. Property and construction conditions are also mixed: sector activity expanded in July, but material-cost pressures and skilled-labour constraints remain part of the operating backdrop.

Outlook

As at 3 September 2026, the next material operating evidence is the quarter ending 30 September 2026, with its filing expected between 12 November 2026 and 2 March 2027. That release will show whether the June revenue acceleration and operating-margin improvement continued after the ownership transfer.

The available data cannot establish Unity Plaza occupancy, lease renewals, rental-rate changes or the financial effect of the group-level share transfer.

About this report. Generated on Sep 3, 2026 from market data up to Sep 3, 2026, 6 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.

Previous reports