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Windforce PLC: research report

OvervaluedbearishSep 29, 2026

Evidence points to a bearish assessment: June net margin was the worst of six comparable June quarters while the shares trade at 35.6 times earnings. New projects have lifted renewable capacity to about 268 MW.

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Why bearish

  • June net margin was 33.4%, the weakest of six comparable June quarters, while net profit grew only 5.1% despite 23.4% revenue growth.
  • The proposed LKR 4.0 billion green bond was withdrawn, while total debt had risen to LKR 22.3 billion by June.
  • The shares score 12 of 100 on price against book value, earnings and dividends, placing them in the exchange's Overvalued band.

Against this. Commissioned battery storage and floating solar projects lifted renewable capacity to about 268 MW, expanding the operating asset base.

Operating margin
42.5%sector 34.5%
from 47.7% a year earlier
Net margin
33.4%sector 20.7%
from 39.2% a year earlier, revenue +23.4%
Return on equity
5.8%
twelve months to Jun 30, 2026, unaudited
P/E
35.7sector 24.7
earnings Rs 1.12 per share
P/B
2.07sector 1.86
book Rs 19.29 per share
Dividend yield
0.00%sector 1.43%
trailing twelve months

Current figures, updated daily from filings to Jun 30, 2026. The report below was written on Sep 29, 2026. Sector figures are the median of 11 listed companies in the same sector.

Overview

WindForce owns, develops and operates wind, solar, hydro and battery-storage assets, while also providing EPC and operations and maintenance services. The latest quarter combined higher electricity-related revenue with weaker conversion of that revenue into profit, while recent project commissioning broadened the renewable asset base.

Price performance

WIND closed at LKR 39.90 on 29 September 2026. It fell 8.3% over three months, versus a 7.1% fall in the ASPI, so it lagged the market modestly through that period.

The share sits 44.9% of the way through its 52-week range. Recent volatility and trading volume are both below WindForce's own recent norms, but liquidity remains limited: median daily turnover was LKR 3.0 million, and a LKR 1 million order is about 33% of what trades on a typical day, a large part of a day's trading.

The three-year record shows one fall of 15% or more, with the deepest at 27.2%; it has not yet recovered. That is a record of a prolonged prior retreat, not a level expected to hold.

Valuation

At 35.6 times P/E, the market is paying LKR 35.60 for every LKR 1 of trailing profit, and at 2.07 times P/B it pays LKR 2.07 for each LKR 1 of net assets. These are above the power and energy peer medians of 18.73 times and 1.76 times respectively. WindForce sits at the 75th percentile on P/E and 67th percentile on P/B within the sector, placing it toward the more expensive end of the peer group.

Against its own record, P/B is more expensive than 80% of days since April 2021, while P/E is more expensive than every day before 2026 and all but 103 days since April 2021. A buyer at this price is also relying heavily on the latest quarter: it supplied 49.9% of trailing EPS, and the P/E would be 32.8 times had that quarter earned its year-ago net margin on the same revenue.

The quoted dividend yield is nil. The last two recorded financial years each paid LKR 1.00 per share, so the absence of a current yield means the valuation rests on earnings and asset expansion rather than cash income.

News and sentiment

Coverage has been unusually heavy, with 17 articles in the past 30 days against WindForce's usual monthly baseline of 6. Of 22 material articles over 90 days, 13 were positive and 5 negative, with much of the positive coverage centred on battery storage and solar commissioning.

Reported on 18 September, the company commissioned a 10 MW/40 MWh grid-scale battery facility and a 5 MW floating solar plant, taking renewable capacity to about 268 MW. On 25 September, six project companies reported successful bids for 28.25 MW/143.75 MWh of further storage, requiring estimated equity investment of LKR 944 million, but formal awards, approvals and agreements remain pending.

The funding picture moved the other way: on 29 September WindForce withdrew the listing application for its proposed LKR 4.0 billion green bond because of adverse market conditions. That removes a proposed debt funding route while the storage pipeline still requires capital.

Financials

June-quarter revenue rose 23.4% year-on-year to LKR 2.6 billion, but operating profit grew 10.1% and net profit only 5.1% to LKR 875 million. The quarter therefore produced more revenue, but less incremental profit from each additional rupee of sales.

Gross margin was 55.7% against 61.8% a year earlier, operating margin was 42.5% against 47.7%, and net margin was 33.4% against 39.2%. June was the worst of six comparable June quarters for both gross and net margin, while operating margin ranked fifth of six. The margin decline, rather than revenue demand, is the main weakness in the latest filing.

Below-the-line costs absorbed LKR 240 million, up from LKR 180 million a year earlier, further limiting the translation of operating profit into earnings. The latest quarter remains historical as at 29 September 2026; the next filing will cover the September quarter.

Group equity stood at LKR 32.1 billion at June. Of reported June profit, LKR 112 million belonged to minority shareholders, so group net profit is larger than the profit attributable to the ordinary shares being valued.

Risks

The leading risk is funding strain alongside asset expansion. Total debt reached LKR 22.3 billion at June, while the latest audited annual balance sheet carried gearing of 48.9% of owners' equity and interest cover of 2.72 times. Operating profit covered the annual interest bill fewer than three times, leaving less room for higher borrowing costs or weaker generation income.

Cash conversion was 0.55 times in the year to March 2026, meaning only about 55 cents of operating cash flow arrived for each rupee of operating profit. Free cash flow was negative LKR 216 million after capital expenditure, and the subsequent withdrawal of the proposed green bond leaves project funding more dependent on other sources.

Short-term liquidity was comparatively sound, with a current ratio of 2.79 times. That means the group had LKR 2.79 of assets expected to turn into cash within a year, including receivables and other current assets, for each LKR 1 of bills due within that year. Minority interests received 28.4% of annual group profit, which limits the share of group earnings available to ordinary shareholders.

Outlook

As at 29 September 2026, the next scheduled event is the September interim filing, expected between 6 November and 14 November. It will show whether the June margin weakness persisted after the newly commissioned storage and floating-solar assets entered the operating base.

The pending 28.25 MW storage bids are the other company-specific swing factor: formal awards and regulatory approvals would move the projects from bids toward buildable assets, while the data does not state their future revenue or profit contribution. Sector conditions also include rising yields and policy attention to electricity pricing, increasing the importance of financing terms after the green-bond withdrawal.

About this report. Generated on Sep 29, 2026 from market data up to Sep 29, 2026, 22 material news articles over 90 days and financials to Jun 30, 2026, and scored 12 of 100 on value (overvalued) when it was written. 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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