Overview
Vidullanka PLC is a renewable power developer and operator across hydro, solar and dendro with EPC capabilities, now adding grid battery storage. At a market cap of LKR 20.6 billion, it runs a diversified portfolio, reporting installed capacity of 51 MW and about 200 GWh annual generation across Sri Lanka and Uganda. Strategy shifted up a gear in 2026 with BESS awards alongside Windforce and a 49% investment in the Storex vehicle for awarded projects, deepening its role in Sri Lanka’s grid transition. The company also pursues engineering services and an e-mobility pilot, and continues to emphasize sustainability and community programs across its operating geographies.
Price performance
Momentum cooled after a strong run: the share is up 51.4% over 12 months versus the ASPI’s 12.5%, but down 10.4% over three months as the market softened. The stock has pulled back from its 52-week high of LKR 28.9 and last closed at LKR 21.60 within a LKR 14.2 to 28.9 range. The consolidation leaves the name still well ahead on a one-year view, yet closer to the middle of its range, with sentiment likely to track execution on the new storage projects and dividend cadence. Short-term beta to the ASPI remains moderate, historically giving room for stock-specific catalysts to matter.
Valuation
Vidullanka trades at 13.76 times earnings, a discount to the power and energy median of 15.09, suggesting room for a re-rating if new projects scale. Price-to-book is 2.41, not cheap in absolute terms, but consistent with an ROE profile of 18.6 that supports a richer multiple than asset-heavy peers. The dividend yield is 2.3%, below the sector’s 3.1% and reflective of reinvestment needs during a buildout phase. On balance the mix reads as quality at a market-like price: earnings not stretched on P/E, a higher P/B explained by returns, and an income profile that should grow if operating cash flow from BESS and EPC workbeds in.
News and sentiment
Coverage has been active and positive: 9 material articles in 90 days, with 7 positive, 0 negative and 2 neutral. The company announced a first interim dividend of LKR 0.20 per share, ex on 2026-07-20, signalling confidence in cash generation. The bigger strategic news is entry into grid-scale battery storage: Vidullanka and Windforce were awarded Sri Lanka’s largest BESS program, and the Group agreed to co-invest via the Storex platform that holds multiple CEB-awarded projects with approvals and financing in place. Trading was briefly halted in July for disclosures and then resumed in orderly fashion. Overall sentiment skews supportive, anchored by visible growth catalysts.
Financials
March-quarter operating dynamics shifted. Gross margin rose to 72.4% from 22.1% a year earlier, while operating margin eased to 45.9% from 56.0% as cost mix normalised. Net margin expanded to 61.7% from 41.9%, with below-the-line items boosting earnings. Year-on-year, operating profit growth was modest but net profit accelerated sharply, underscoring the contribution from associates, finance and FX lines rather than purely operating leverage. Share count increased modestly during FY26, a small mechanical drag on per-share comparatives. These filed figures pre-date the mid-2026 storage awards and related investment; near-term reported results will increasingly reflect mobilization and any EPC revenue recognition from the new pipeline.
Risks
Execution and capital deployment are the swing factors. Grid-scale storage is capital-intensive and schedule-sensitive, and slippage in approvals, procurement or grid integration could defer cash flows. Hydrology variability can still affect hydro output, and regulatory changes to tariffs or net metering may alter project economics. International exposure introduces FX translation and repatriation risk. Financing terms matter while domestic rates remain elevated and oil-linked input costs are volatile. Partner and project concentration in the initial BESS rollout also raises counterparty and construction risk. Finally, recent quarters showed profits aided by below-the-line items; if these tailwinds fade, reported earnings could normalise faster than expected.
Outlook
The near-term watchlist is about conversion and quality of earnings. Evidence that BESS awards reach notice-to-proceed, with mobilization visible in EPC billings, would validate the growth leg. On core operations, sustaining an operating margin at or above 50% would signal healthy mix and cost control through seasonality. Investors should also look for steady dividend signalling as projects advance, while management details funding structures and timelines for the storage portfolio. The unknowns are timing and phasing of revenue recognition on BESS, and whether below-the-line boosts persist. Clear disclosure on project milestones and cash conversion will be the catalysts for a re-rating.