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Tess Agro PLC: research report

OvervaluedbearishAug 21, 2026

Tess Agro remains loss-making despite a sharp improvement in gross margin in the June quarter. Revenue grew 46.4%, but operating and net margins remained negative on a total-income basis.

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Why bearish

  • The June quarter still produced a total-income operating margin of -15.4%.
  • The P/E of 44.55 sits at the 90th percentile of consumer-retail peers.
  • The latest available balance-sheet record shows gearing at 204.6% of owners' equity.

Against this. Revenue grew 46.4% in the June quarter and gross margin was the best of seven comparable June quarters at 74.8%.

Operating margin
-15.4%
of revenue plus other operating income, which is larger than revenue here
Net margin
-13.0%
of revenue plus other operating income; profit here is mostly not from revenue
Return on equity
5.8%sector 15.4%
full year to Mar 31, 2026
P/E
34.2sector 13.3
earnings Rs 0.05 per share
P/B
2.69sector 1.66
book Rs 0.67 per share
Dividend yield
0.00%sector 1.46%
trailing twelve months

Current figures, updated daily from filings to Jun 30, 2026. The report below was written on Aug 21, 2026. Sector figures are the median of 35 listed companies in the same sector.

Overview

Tess Agro operates cold-chain facilities, seafood processing and EU distribution, alongside tin-can manufacturing, warehousing and construction-related activities. The June quarter showed a meaningful reduction in operating and net losses, but the group has not yet converted improved gross profitability into positive operating earnings.

Price performance

The share was positioned at 66.7% of its 52-week range. Recent 60-day annualised volatility was 62.0%, below its own one-year level of 88.9%, while 20-day volume was 12.9% below its 60-day average. The price record is therefore strong over a year but remains volatile and less actively traded recently.

Valuation

The latest audited ROE available in the data was negative 4.7% for the year ended 2023-03-31, so the premium to sector book multiples is not supported by current reported returns. The stock page shows a 0.0% dividend yield, but dividend history is not provided, so payout direction and sustainability cannot be assessed.

News and sentiment

Direct coverage is thin: only two material company articles appeared in the latest 90-day window, both neutral. They concerned board-directorate changes on 2026-07-08 and committee changes on 2026-07-10. No confirmed or undated corporate actions are recorded.

Financials

Equity attributable to owners was LKR 331.6 million, up from LKR 313.9 million on the same company basis. Shares outstanding were 743.7 million, unchanged from the comparable period, so the per-share result was not affected by a recent share-count change. Below-the-line items reduced the operating loss by LKR 217 thousand.

Risks

The business also faces sector-level cost pressure: consumer-retail coverage identified energy-linked inflation and exchange-rate pass-through as risks to transport, distribution and imported goods, while EU packaging compliance guidance adds requirements for food exporters.

Outlook

Lower Treasury bill yields and the absence of expected further policy-rate hikes provide a more favourable financing backdrop as at 2026-08-21, but elevated inflation, reported at 7.3%, remains a cost risk. The available data cannot establish whether June's gross-margin improvement will translate into positive operating profit in the next filing.

About this report. Generated on Aug 21, 2026 from market data up to Aug 21, 2026, 2 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.

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