Investment Partners

12/11/2025

Synopsis of SUN IR Call – 2QFY26

Healthcare
• Healthcare recorded 1.7% YoY topline growth in 2QFY26, supported by volume expansion across the pharmaceutical, distribution, and retail segments. However, overall profitability was weighed down by a slowdown in Lina manufacturing and one-off incremental tax provisions from internal business model alignment.
• Pharma posted a 64.8% YoY increase in revenue, driven by 7.6% YoY volume growth, outpacing the broader industry growth of 7.3% YoY. New oral insulin products are expected to launch, helping regain lost market share in the this segment.
• Healthguard Pharmacy reported a 12.9% YoY revenue increase, primarily volume-driven and further supported by value growth as basket sizes continued to expand despite stable pricing.
• Lina Manufacturing recorded a 15% YoY revenue decline, mainly due to a reduction in government purchase orders for 2025.

Consumer
• Consumer recorded a 1.5% YoY revenue contraction in 2QFY26, primarily due to weaker performance in the export segment.
• The export business declined 9.2% YoY, driven by softer demand in high-value tea categories, following the adverse impact of U.S. tariff adjustments. However, revenue is expected to recover in the coming quarters, supported by steady demand from Western and Far Eastern markets during the festive season.

Agri
• Agri recorded a 23% YoY revenue increase in 2QFY26, mainly supported by the strong performance of the palm oil segment.
• Palm oil posted a 26% YoY growth in revenue, driven by an 11% YoY increase in production volumes and favorable pricing conditions.
• Dairy reported a 2.9% YoY increase in revenue, supported by a 3% YoY rise in milk sales volumes. However, margins came under pressure due to flat average milk prices compared to the previous year.

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CAL Research

WhatsApp Group Invite

07/11/2025

BUDGET 2026

Revenue Proposals, effective from 1 April 2026:

- Annual turnover threshold for VAT and SSCL reduced from LKR 60 mn to LKR 36 mn in view of broadening the tax base.
- VAT and SSCL to be imposed on imported coconut oil and palm oil, replacing the current Special Commodity Levy of LKR 150/kg and LKR 275/kg imposed respectively currently.
- CESS of LKR 100/kg charged on imported fabric to be removed; VAT to be imposed, similar to locally manufactured fabric
- Social Security Contribution Levy (SSCL) to be charged at the time of import or manufacture and sale of vehicles
- Current import duty rates of 0%, 15%, 20% revised in line with the National Tariff policy to 0%, 10%, 20%, 30%

07/11/2025

BUDGET 2026

• Digital IDs to be issued by 1st March 2026.
• Service charges for government services to be waived when payments are made online; service fees waived for QR-code transactions below LKR 5,000.
• Investments in new digital communication towers to receive a 5-year tax holiday.
• LKR 5 bn subsidy allocated for the establishment of data centers.

07/11/2025

BUDGET 2026

- Daily wage for estate workers to increase from LKR 1,350 to LKR 1,550 effective January 2026.
- Government will provide also provide an attendance allowance of LKR 200 per worker, bringing the total daily wage to LKR 1,750.

07/11/2025

BUDGET 2026

- 4 million tourist arrivals and USD 8 billion in tourism earnings targeted by 2030.
- LKR 1 billion allocated for the development of Hingurakgoda airport - scheduled for completion by 2026. Airports in Jaffna, Sigiriya & Trincomalee also scheduled for development
- Expansion of Bandaranaike International Airport (BIA) is expected to restart in 1Q next year.

07/11/2025

BUDGET 2026

- As of 30th Oct, total LCs opened for vehicles amounts to USD 1,933 mn; vehicles imported amount to USD 1,373
- The medium-term GDP growth target of around 7% is expected to be underpinned by stronger export performance, increased FDI's, and gains in overall productivity.

07/11/2025

BUDGET 2026

- Gross official reserves are expected to be USD 7 bn by end-2025E
- Government revenue is expected to reach 16% of GDP in 2025E.
- Primary surplus to surpass 2.3% of GDP; this will support debt-to-GDP reduction to 96.8% by 2026E
- Debt-to-GDP is projected to reach 87% by 2030

19/03/2025

Treasury Yields Resume Downward Trend

Treasury bill yields declined for the 15th consecutive week across all maturities.
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19/03/2025

2024 වසරේ ආර්ථිකයේ 5%ක වර්ධනයක්

2024 සඳහා ශ්‍රී ලංකා ආර්ථිකයේ 5% ක සමස්ත වර්ධනයක් වාර්තා කර ඇති බව ජනලේඛන හා සංඛ්‍යාලේඛන දෙපාර්තමේන්තුව පවසයි.

2024 සිව්වන කාර්තුව සඳහා ජාතික නිෂ්පාදන ඇස්තමේන්තුව ඉදිරිපත් කරමින් එම දෙපාර්තමේන්තුව මේ බව සඳහන් කර තිබේ.

අලුත් වූ සාර්ව ආර්ථික ස්ථාවරත්වය මධ්‍යයේ මෙලෙස ශක්තිමත් පරිවර්තනයක් වාර්තා කරමින් ඇති බවද එහි වැඩිදුරටත් දැක්වෙයි.

Sri Lanka’s economy recorded a 5.0% growth in 2024, marking a recovery from contractions in the previous two years, according to the latest National Accounts Estimates released by the Department of Census and Statistics (DCS). The country’s Gross Domestic Product (GDP) at constant prices increas...

13/03/2025

LOLC Holdings PLC

07/03/2025

*Treasury Bill Yields Extend Months-long Descent*

Treasury bill yields continued their downward trend for the 13th consecutive week across all three maturities.

The 3-month yield dropped by 4bps to 7.53%, while the 6-month and 1-year yields eased by 1bp each to 7.86% and 8.34%, respectively.