Overview
Union Chemicals Lanka is a specialty chemicals maker and trader focused on waterborne polymers, adhesives, coatings and industrial chemicals for paint, textile and adhesive customers in Sri Lanka. The latest filings show robust profitability on a clean balance sheet, with quarterly margins among its best March prints and a consistent dividend track.
Price performance
UCAR closed at LKR 2,426 as of 2026-08-07. The share rose 24.2% over three months versus the ASPI’s -7.1%, and is up 190.0% over one year against 9.5% for the index. It sits 18.8% below its 52-week high.
Recent volatility is lower than its own yearly norm and trading volumes are far below the recent average, consistent with an illiquid counter despite large price gains.
Valuation
At a P/E of 12.78 and P/B of 2.39, the stock trades on a sector-like earnings multiple but a richer book multiple that is consistent with a 19.2% ROE. The dividend yield is 3.4% on a rising payout, with DPS increasing from 45 in FY2023 to 82 in FY2025.
News and sentiment
Coverage is thin: 2 material articles in 90 days, both positive. The most recent event was a LKR 44 final dividend (ex 2026-06-15).
Anomalies flag that the share’s +24% three-month move came with no company news in the past month.
Financials
Quarter ended 2026-03-25 delivered a net margin of 17.5%, ranked 2 of 12 comparable company quarters, with a below-the-line drag of LKR 32.23 million separating operating and net profit.
For FY2025, net profit grew 14.9% year-on-year despite revenue falling 3.6%, indicating resilient margins at the full-year level. These are historical figures pending the next filing.
Risks
The most immediate risk is trading liquidity and price swings: average daily volume is just 34 shares, 20-day volume is down 93.6% versus 60 days, and 60-day annualised volatility is 76%.
Cash generation consistency is the next watchpoint: cash conversion was 0.66 in FY2025. Balance sheet risk is low, with gearing at 0%, but that places more of the investment case on sustained operating execution and cash conversion.
Outlook
As at 2026-08-07, the next filing for the quarter to 2026-06-30 is due now, with exchange timing typically between 2026-07-28 and 2026-10-26. That print will update whether the near-best March-quarter margins and full-year resilience carried into the new quarter.