Sunshine Holdings records strong growth in 1HFY27 with revenue up 24.4% and PAT rising 44.3%

Diversified Sri Lankan conglomerate Sunshine Holdings PLC (CSE: SUN) reported strong top-line and bottom-line growth during the six months ended 30 September 2026 (1HFY27), recording a consolidated revenue of Rs. 40.2 billion, an increase of 24.4% year-on-year (YoY). The Group's profit after tax (PAT) increased by 44.3% YoY to Rs. 3.7 billion, supported by the resilience of the Group’s diversified portfolio across Healthcare, Consumer and Agribusiness

Healthcare remained the largest contributor to Group revenue, accounting for 49% of the total, followed by Consumer at 37% and Agribusiness at 14%. The Group's gross profit increased by 11.7% YoY to Rs. 11.5 billion, while its gross profit margin stood at 28.7%, compared to 31.9% in the corresponding period last year, primarily reflecting regulated pharmaceutical price reductions and the impact of a weaker rupee on the Healthcare sector.

Group earnings before interest and taxes (EBIT) increased by 10.5% YoY to Rs. 6.1 billion, while the EBIT margin stood at 15.1%, compared to 17.0% in 1HFY26. Higher net finance income and a lower effective tax rate supported the Group's profitability, with the PAT margin improving to 9.2% from 8.0% in the previous year. The Group also recorded stronger second-quarter momentum, with revenue increasing by 32.0% YoY to Rs. 21.6 billion and PAT growing by 82.4% YoY to Rs. 2.3 billion.

Commenting on the performance, Sunshine Holdings PLC Group CEO Shyam Sathasivam said, "Our first-half performance reflects the strength of our diversified business model and our ability to deliver growth across all three sectors. While regulatory pricing pressures and currency movements continue to affect margins, we have maintained our focus on operational efficiency and strategic expansion. Our investments in local pharmaceutical manufacturing, digital healthcare and export-oriented businesses are important steps towards strengthening our long-term competitiveness. We remain committed to building resilient businesses and creating sustainable value for our stakeholders."

Healthcare

The Group's Healthcare sector recorded revenue of Rs. 19.6 billion during 1HFY27, representing a 13.3% YoY increase. Growth accelerated during the second quarter, with revenue rising by 20.5% YoY. The sector’s EBIT margin however, declined to 11.2% from 13.1% in 1HFY26, mainly due to regulated price reductions and the impact of a weaker rupee on imported products. The Pharmaceutical agency segment recorded a 24.0% YoY revenue contraction, mainly due to a change in operating model compared to last year, lower shipments from certain principals and regulatory-related stock shortages. Medical Devices and Healthguard Distribution recorded revenue growth of 19.9% and 4.1% YoY, respectively, while Healthguard Pharmacy remained broadly stable. Lina Manufacturing, the Group's pharmaceutical manufacturing arm, delivered a strong performance with revenue increasing by 35.1% YoY, supported by deliveries against government orders.

During the period, Sunshine Holdings also advanced its commitment to strengthening local pharmaceutical manufacturing by finalising the joint venture agreement with India's Zydus Lifesciences Limited. The joint venture signed an agreement with the Board of Investment of Sri Lanka (BOI) to develop a GMP-compliant oral solid dosage manufacturing facility at the Horana Export Processing Zone.

Further strengthening its healthcare portfolio, Sunshine Healthcare Lanka Limited acquired a 21.92% stake in Digital Health (Private) Limited, operator of the Doc990 platform, in October 2026, following the reporting period. This investment expands the Group's presence in digital healthcare services, complementing its existing pharmaceutical agency, distribution, manufacturing and retail operations.

Consumer

The Group's Consumer sector delivered strong revenue growth of 53.5% YoY to Rs. 15.0 billion in 1HFY27, primarily driven by the consolidation of JAPC and the recovery of its tea export business. Excluding JAPC, sector revenue increased by 13.0% YoY, supported by growth in branded tea and tea exports. The sector's EBIT margin improved to 8.0% from 7.8% in the corresponding period last year.

The Branded Tea business recorded revenue growth of 5.6% YoY, led by Watawala Thei, while Zesta continued to operate in a highly competitive premium tea market. The Confectionery business registered a 2.2% YoY revenue increase, supported by growth in gums and wafers, which offset declines in toffee and candy categories.

The Tea Export business recorded a strong recovery, with revenue increasing by 25.4% YoY during 1HFY27. Second-quarter revenue grew by 60.9% YoY, driven by additional business from key customers and a higher contribution from value-added tea products.

Meanwhile, JAPC's spice export revenue grew by 28.6%, supported by demand across its key product categories. The consolidation of JAPC further strengthened the Consumer sector's export portfolio, expanding the Group's presence in the spice export business.

Agribusiness

The Group's Agribusiness sector, represented by Watawala Plantations PLC (CSE: WATA), recorded revenue of Rs. 5.6 billion during 1HFY27, reflecting a 7.2% YoY increase, primarily driven by the oil palm business.

Oil palm revenue grew by 9.1% YoY to Rs. 5.0 billion, supported by increased own-crop production. However, growth moderated during the second quarter due to lower bought-crop availability and reduced oil extraction rates.

The Dairy business recorded revenue of Rs. 561.1 million, a decline of 2.9% YoY, as higher selling prices partly offset lower milk sales volumes. While the business continued to face higher effluent management costs, operating performance improved during the second quarter. The Agribusiness sector's EBIT margin stood at 47.8%, compared to 49.1% in 1HFY26, reflecting higher operating costs in the oil palm business.

During the period, Sunshine Holdings also increased its stake in Watawala Plantations PLC to 77.02% through Sunshine Wilmar (Private) Limited. Separately, Watawala Plantations acquired the remaining non-controlling interest in Lonach Dairy Limited, making it a wholly owned subsidiary.