Overview
Sri Lanka-based Sierra Cables manufactures and exports electrical wires and cables to domestic and international customers. The business delivered a clear step‑up in profitability in FY26 and broadened export reach; even the March quarter, structurally its softest on operating margin, produced a clean profit.
Price performance
The share closed at LKR 31.30 on 2026-08-07. It is up 99.4% over 1 year versus the ASPI’s 9.5%, and up 15.5% over 1 month versus -2.1% for the index. The price sits 18.9% below its 52‑week high, indicating room before retesting the top of the range.
Valuation
Sierra Cables trades at 6.33x earnings versus the manufacturing sector median of 12.66x and ranks sector‑cheapest on P/E (percentile 0). With ROE at 29.9%, a P/B of 1.89 is above the sector median but consistent with stronger earnings power. The stock yields 0.0% and there are no recorded dividends in the dataset.
News and sentiment
Coverage over the past 90 days was normal with two material articles: one positive and one neutral. A 15 June release reported FY25/26 revenue passing LKR 16 billion and profit up 194% year‑on‑year, aligning with the filed annual uplift. An April article noted the EPF’s 2025 exit from SIRA among several holdings; no corporate actions are currently scheduled.
Financials
March is structurally its weakest quarter for operating margin, so like‑for‑like matters. In the latest March quarter, gross margin rose from 14.9% to 21.1%, operating margin from -2.8% to 13.8%, and net margin from -4.9% to 13.8%.
The below‑the‑line impact in the quarter was negligible, so the uplift was driven by operations. Full‑year results show a step‑change in scale and profitability, but the detail sits in the quarterly repair above.
Risks
The lead risk is cash generation: cash conversion was -0.98 and FY26 saw a net operating outflow of LKR 3.02 billion. Leverage is material, with gearing at 88.7% of owners’ equity and interest cover of 3.34x. Liquidity is comfortable (current ratio 2.25), but price risk remains elevated with 1‑year volatility at 51.9%.
Outlook
The next event is the June 2026 quarter filing, due between 2026-07-28 and 2026-10-26; as at 2026-08-07 it is due now. That print will show whether the operating margin gains carried into the non‑weak season and, critically, whether cash conversion improved. Easing local T‑bill yields as of early August would be consistent with relief on finance costs for a geared balance sheet.