Overview
Vidullanka operates renewable generation, EPC and project-delivery businesses across hydro, solar and dendro technologies, with a reported 51 MW operating portfolio. The June quarter showed a marked improvement in profit on modest revenue growth, while the company has also committed capital to solar, biomass and battery-storage projects that can broaden the asset base beyond existing generation.
Price performance
At LKR 21.70 on 18 September 2026, VLL was up 3.3% over one month while the ASPI fell 2.0%; its 21.2% one-year gain also exceeded the index's 0.7%. The shares nevertheless remained 24.9% below their 52-week high and sat 37.4% of the way from the low to the high, so the quoted valuation is not being paid at the year's peak.
The last 60 days were less volatile than Vidullanka's own one-year norm, while 20-day volume was above the preceding 60-day level. The three-year record includes two falls of 15% or more, the deepest 35%, which has not yet recovered. Median daily turnover was LKR 785,437: a LKR 1 million order is more than everything that trades on a typical day, 127% of it, making that order large relative to normal trading activity.
Valuation
The voting share trades on 12.8 times trailing earnings, or about LKR 12.80 paid for each LKR 1 of the last twelve months' profit, versus a 26.8 times sector median. Its P/B is 2.18 times, meaning LKR 2.18 paid for each LKR 1 of net assets, above the sector median of 1.80; the P/B sits at the expensive end of the sector, at the 78th percentile. A trailing ROE of 16.9% helps explain why the share commands more than book value.
Its own record is less accommodating: the share is more expensive than at 8 of 12 recorded year-ends on P/E and 10 of 12 on P/B. A buyer at this price is relying materially on the latest June quarter, which supplied 30.7% of trailing EPS; had that quarter earned its year-ago margin, P/E would be 14.7 times rather than 12.8 times.
The 2.3% dividend yield is below the sector median of 3.9%. Dividends recorded on today's share basis rose to LKR 1.58 in FY2025 before declining to LKR 0.65 in FY2026; FY2027 currently includes only the LKR 0.20 first interim dividend, so it is incomplete.
News and sentiment
Coverage was unusually heavy, with 8 articles in the past 30 days against Vidullanka's normal monthly rate of 2.8; 10 of 13 material articles over 90 days were positive and none negative. The substantive flow concerns project delivery rather than reported financial results.
On 18 September 2026, the first 10 MW/40 MWh Storex battery facility was connected to the grid. Vidullanka holds 49% of Storex, which is developing 12 awarded battery projects. Separately, the 10 MW Ranna solar plant was reported complete on 3 September 2026 but awaiting grid energisation, while the company made a first LKR 100 million equity infusion into the 6.6 MW Medawachchiya dendro project. The LKR 0.20 interim dividend went ex-dividend on 20 July 2026, so a buyer today does not receive it.
Financials
June-quarter revenue rose 7.5% year-on-year to LKR 1.1 billion, while net profit climbed 84.5% to LKR 556 million. Profit therefore grew far faster than the revenue line, increasing the earnings available to shareholders without a comparable rise in sales.
Gross margin was 73.0%, essentially unchanged from 73.1% a year earlier, and ranked third of the last seven June quarters. The company earned LKR 330 million outside its revenue line, so revenue-only operating and net margins are not meaningful measures for this quarter. Net profit as a share of total income was 38.5%; the operating-margin figure is not available from the filed data. The June net margin measured against revenue was the best of seven comparable June quarters, but it is not used here because the material other operating income distorts that calculation.
Equity increased to LKR 10.6 billion from LKR 8.5 billion a year earlier. The latest filing used 1.036 billion shares, compared with 1.027 billion in the year-ago June filing, so the improvement in absolute profit was not driven by a major share-count change.
Risks
The leading risk is a more leveraged balance sheet. At the latest audited year-end, debt equalled 52.1% of owners' equity, up from 31.6% a year earlier, while net debt reached LKR 3.3 billion. This means a larger portion of the business is financed by lenders rather than shareholders as the project pipeline expands.
Interest cover measured on profit before tax with finance costs added back fell to 6.56 times from 8.87 times. The current ratio, which compares assets expected to turn into cash within a year, including receivables and unsold goods, with bills due in that year, declined to 1.69 from 2.10. Annual operating cash flow covered only 0.86 times net profit and free cash flow was negative LKR 1.4 billion, so reported profit was not fully converted into cash after investment spending.
Ranna cannot begin commercial generation until its grid connection is energised. The group is also exposed to execution and funding requirements across the Storex, solar and biomass developments; the recent market backdrop of higher domestic yields and a weaker rupee raises the cost and financing sensitivity around capital-intensive energy projects.
Outlook
As at 18 September 2026, the immediate company-specific swing factor is grid energisation of the completed Ranna project: connection would allow the 10 MW plant to start commercial generation, while continued delay leaves the completed asset without that contribution. Storex's first connected facility provides evidence of rollout progress, but the data does not disclose the future revenue or profit contribution from the battery portfolio.
The next financial test is the September 2026 interim quarter, expected between 6 and 14 November 2026. That filing will supersede the June figures and show whether the sharply higher June profit was sustained while debt and project investment continued to rise.