Sunshine Holdings PLC (CSE: SUN), a diversified conglomerate in Sri Lanka, reported a consolidated revenue of LKR 18.5 billion for the first quarter of the 2026/27 financial year (1QFY27), marking a notable year-on-year (YoY) growth of 16.6%. This impressive performance was bolstered by the company’s varied portfolio and the integration of Joint Agri Products Ceylon (Private) Limited (JAPC).
The healthcare sector remained the largest contributor, accounting for 49.2% of total revenue, followed by the consumer segment at 35.6%, and agribusiness at 15.2%. Despite the strong revenue growth, profitability faced challenges due to regulatory pricing pressures and operational difficulties in the healthcare sector, along with rising costs in agribusiness.
Gross profit rose by 3.2% YoY to LKR 5.2 billion, yet the gross profit margin declined by 366 basis points to 28.1%. Earnings before interest and tax (EBIT) fell by 7.8% YoY to LKR 2.4 billion, resulting in an EBIT margin of 13.2%. Nevertheless, profit after tax saw a 6.0% YoY increase, reaching LKR 1.4 billion.
Shyam Sathasivam, the Group Chief Executive Officer of Sunshine Holdings PLC, commented on the results, stating, “We achieved substantial revenue growth in the first quarter despite facing margin pressures in key sectors. This performance underscores the strength of our diversified operational strategy and the positive impact from JAPC, although profitability was impacted by regulatory challenges and rising costs.”
Sathasivam further emphasized the company’s focus on maintaining earnings quality, enhancing local manufacturing capabilities, and pursuing strategic growth opportunities. The establishment of Zydus Sunshine Lifesciences marks a significant advancement in strengthening local pharmaceutical production and enhancing the resilience of Sri Lanka’s healthcare supply chain. Investments in brands, capabilities, and operations will continue to be a priority to foster sustainable long-term value.
During this quarter, Sunshine Healthcare Lanka Limited partnered with Zydus Lifesciences Limited from India to create Zydus Sunshine Lifesciences (Private) Limited. This joint venture aims to develop a manufacturing facility that complies with Good Manufacturing Practices at the BOI Horana Export Processing Zone, contributing to the growth of local pharmaceutical manufacturing capabilities.
In the healthcare sector, the group generated LKR 9.1 billion in revenue, reflecting a YoY growth of 5.9%. The increase was driven by advancements in medical devices and pharmaceutical manufacturing, which helped mitigate the effects of price reductions mandated by the National Medicines Regulatory Authority and supply-side issues.
However, the pharmaceutical agency segment experienced an 18.2% YoY decline due to reduced volumes and broader industry challenges. Conversely, the medical devices sector reported an 8.8% revenue increase, while Healthguard Distribution and Healthguard Pharmacy faced slight revenue declines of 0.3% and 0.9%, respectively. Lina Manufacturing achieved a robust revenue growth of 20.5% YoY, aided by government product deliveries during the quarter.
The consumer sector saw revenues of LKR 6.6 billion, representing a significant YoY increase of 38.0%, largely attributed to the consolidation of JAPC. Excluding JAPC’s contributions, the consumer segment experienced a 2.1% revenue growth, bolstered by the resilience of the branded tea market and the ongoing recovery of the confectionery segment.
Branded tea revenue rose by 8.3% YoY, with strong performances from the Watawala Thei and Ran Kahata brands, despite increased competition impacting the premium tea market. The confectionery segment also grew by 6.9%, driven by improved sales in the gums and wafers categories. However, tea export revenue fell by 6.3% due to lower volumes from key customers, while JAPC’s spice export business grew by 11.5%, supported by its cinnamon, coconut, black pepper, and clove products.
In agribusiness, the group, represented by Watawala Plantations PLC (CSE: WATA), achieved revenues of LKR 2.8 billion, reflecting a 12.7% YoY growth. The oil palm sector experienced a 17.9% revenue increase to LKR 2.5 billion, driven by stronger market prices, higher sales volumes, and improved crop availability.
Conversely, the dairy segment reported revenues of LKR 258.9 million, which represented a 7.1% YoY decline due to decreased milk sales volumes and heightened input costs. As a result, the EBIT margin for agribusiness moderated to 47.2%, down from 48.8% during the same period last year.
