Overview
Singer Finance provides lending, leasing, deposit-taking and related financing services, with vehicle finance a core activity. Its audited FY2026 results show a much larger lending business and sharply higher profit, while the balance sheet has expanded with it.
The assessment ends bullish, on the same side as the market-wide Moderately undervalued band. That positive operating record is tempered by a funding-heavy balance sheet and a further announced rights issue intended to support capital adequacy and lending.
Price performance
At LKR 50.00 on 11 September 2026, the share was down 9.2% over one year while the ASPI gained 1.8%, so its longer-term return has lagged the market. It was 28.4% up from its 52-week low, placing it in the lower part of its own annual range.
The three-year record shows four falls of 15% or more, with the deepest 51% and not yet recovered. Recent 60-day volatility was 43.6% below its own one-year level, so trading has been quieter than this share's usual year.
Median daily turnover was LKR 677,000 over 60 sessions. A LKR 1 million order is more than everything that trades on a typical day (148% of it), making a position of that size a large part of normal daily trading.
Valuation
The shares trade at 7.4 times trailing earnings, or about LKR 7.40 paid for each LKR 1 of trailing profit, close to the 7.2 times median for 53 banks and finance peers. The 16.3% audited FY2026 return on equity shows that the earnings multiple is supported by a profitable lending book.
At 1.4 times book value, a buyer pays about LKR 1.40 for each LKR 1 of net assets, above the sector median of 0.9 times and higher than 69% of sector peers. Against Singer Finance's own record, it is more expensive than 85% of days since January 2019. The apparent tension is that the price is inexpensive on earnings but carries a relatively full valuation of its stated net assets.
The 2.0% dividend yield is below the sector median of 3.7%. The latest recorded payout is LKR 1.00 per share for FY2026, versus LKR 1.34 in FY2022, with no dividend recorded for FY2023 to FY2025; the yield therefore rests on an irregular payment record rather than a steadily rising distribution.
News and sentiment
Coverage has been unusually heavy, with seven articles in the last 30 days against a normal monthly baseline of 1.8. Of eight material items over 90 days, four were positive and four neutral, with no negative articles recorded.
The material development is the 19 August 2026 announcement of an 8:29 rights issue at LKR 39.20 per share, stated to improve capital adequacy and support lending. Jonathan Alles was appointed chairman effective 12 September 2026, adding more than 37 years of banking and financial-services experience; this is a governance change rather than evidence of an earnings change.
Financials
Audited FY2026 revenue rose 54.0% to LKR 8.5 billion and net profit increased 84.9% to LKR 1.6 billion. This is a substantial improvement in the profit that the shares represent, rather than solely a per-share effect.
For the June 2026 quarter, no gross margin is reported for this finance business. Operating margin was 41.8% versus 41.4% in the June 2025 quarter, while net margin was 17.9% versus 16.8%. However, the June 2026 filing is on a company basis and June 2025 is on a group basis, so those year-on-year margin figures are not like-for-like comparisons. On the comparable company-basis record, both the June operating and net margins were the best of five June quarters.
June-quarter net profit was LKR 466 million, after LKR 621 million of items below operating profit. The share count was 277.9 million following the confirmed 6:16 rights issue in September 2025, compared with 202.1 million a year earlier; per-share changes across that period therefore include a mechanical effect from the larger share base.
Risks
The principal risk is funding and capital intensity. Total debt reached LKR 40.8 billion at March 2026, equal to 423.3% of owners' equity and up from 319.6% a year earlier. In everyday terms, the company owed more than LKR 4 for every LKR 1 attributable to shareholders, making asset quality, funding costs and capital buffers central to the earnings case. The company does not disclose interest cover for the period.
The announced 8:29 rights issue is intended to improve capital adequacy, but its ex-date has not been set and the filing terms are not structured for dilution arithmetic here. Until it is completed, the planned capital strengthening remains pending.
Sector conditions add a borrower-risk consideration. As at 13 September 2026, August inflation was 8.0% amid higher fuel costs, while financing conditions were mixed; higher household and enterprise costs can pressure repayment capacity in a lender with a national consumer and asset-finance book.
Outlook
As at 13 September 2026, the next company-specific event is the announced rights issue. Its ex-date is expected between 13 September and 7 December 2026, based on exchange timing records, and it matters because successful capital raising would add capacity for the stated lending purpose while changing the share base.
As at 13 September 2026, the next quarterly filing covers 30 September 2026 and is expected between 12 November 2026 and 2 March 2027. It will replace the June figures and show whether the enlarged asset base continues to produce strong comparable-basis margins while funding and capital requirements remain contained. The available data cannot establish the eventual subscription outcome or the credit performance of the new lending.