Overview
Sathosa Motors is a commercial vehicle importer, distributor and after-sales service provider centred on ISUZU, with additional Jaguar Land Rover distribution through Access Motors. Its earnings profile has shifted materially from the weak profitability recorded in earlier periods to a much stronger FY2026 result, supported by vehicle sales, parts, workshops and related services.
Price performance
The share rose 30.9% in one week, 30.0% in one month and 37.5% over three months, far ahead of ASPI returns of 1.1%, negative 2.1% and negative 7.1% over the same windows. Over one year it gained 59.4% against the index's 9.5%. The three-month rise occurred with no company news in the last 30 days, so the data does not establish a reason for the move.
The price was LKR 1,590 at the 7 August 2026 close. It sat at 58.3% of its 52-week range, while 60-day annualised volatility was 57.8%, 16.0% below its own one-year level; 20-day volume was 18.0% above its 60-day average. This is strong recent momentum, but with substantial price variability.
Valuation
The 4.61 P/E is well below the consumer-retail sector median of 12.51 and ranks at the 4th percentile among sector companies, making earnings the clearest valuation support. By contrast, the 2.45 P/B is above the 1.67 sector median but only at the 59th percentile, a more ordinary relative position that is consistent with the company's 53.0% annual ROE.
The 2.5% dividend yield ranks at the 63rd sector percentile. It is backed by a rising payout record: dividend per share increased from LKR 15 in FY2025 to LKR 40 in FY2026, with the latest year's payout ratio at 11.6% and dividend cover at 8.63x.
News and sentiment
Coverage is thin: five material articles were recorded in the 90-day window, split between two positive, one negative and two neutral items. The company-specific flow consisted mainly of confirmed FY2026 dividends of LKR 15 and LKR 25 per share, with ex-dates of 6 March 2026 and 9 June 2026 respectively.
There has been no company news in the last 30 days, despite the 37.5% three-month share gain. The limited news flow provides no evidence-based explanation for that price performance.
Financials
The latest quarter, ended 31 March 2026, was substantially stronger year-on-year: revenue grew 1019.1%, operating profit 1737.5% and net profit 4008.0%. Gross margin was 21.5% versus 41.0% a year earlier, operating margin widened to 17.4% from 10.6%, and net margin rose to 11.7% from 3.2%.
The margin mix is important. March gross margin ranked 6th of 7 comparable March quarters, among its worst, while operating margin ranked 3rd of 7 and net margin 2nd of 7. The latest quarter therefore combined weaker gross margin with strong conversion below gross profit. The LKR 446 million gap between operating and net profit was a larger below-the-line drag than the LKR 52 million recorded a year earlier.
For FY2026, revenue reached LKR 24.72 billion, up 731.6%, and net profit reached LKR 2.38 billion, up 675.5%. Annual operating margin was 14.5% and net margin 9.6%. Equity attributable to owners was LKR 3.92 billion, with 6.03 million shares outstanding; no share-count change is shown across the comparable periods.
Risks
The most material risk is cash quality: FY2026 operating cash conversion was only 0.33x, despite the strong profit result, and free cash flow was LKR 276 million. This means working capital or other cash demands absorbed much of the operating profit.
Financing is less pressing than cash conversion but still needs monitoring. Gearing was 36.5% of owners' equity, interest cover was 18.69x and total debt was LKR 1.43 billion; the current ratio was 1.19. Group profit also included a 12.8% share attributable to minority shareholders, so group net profit is not entirely available to the shares being valued.
The wider consumer-retail environment adds pressure: July inflation reached 7.3%, while June vehicle import expenditure fell 27.0% month-on-month and vehicle registrations declined to 58,151 from 62,776. These sector figures do not describe Sathosa Motors directly, but they indicate a less supportive demand and cost backdrop.
Outlook
The next event is the filing for the quarter ended 30 June 2026. As at 8 August 2026, it was due now, with the exchange's historical timing range running from 28 July to 26 October 2026. That filing is the next evidence on whether the strong March earnings profile continued after the reported deterioration in wider vehicle throughput.
As at 8 August 2026, the data cannot establish what drove the recent share rise because company coverage was thin and no company news appeared in the last 30 days. Softer vehicle imports and higher inflation are the main external issues to read alongside the filing, while the already-confirmed FY2026 dividend actions require no further date to be set.