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Lanka IOC PLCLIOC · 2Q FY27, Jul–Sep 2026

Prices up. Margins down.

Revenue rose 38.3% from a year ago to LKR 97.31 Bn, but every profit line fell. Gross Margin dropped to 2.5% from 8.1%, and Profit After Tax fell 67.5% to LKR 963 Mn.

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Share price

Close, 16 October 2026
LKR 124.75
Results declared
16 October 2026

Jul–Sep 2026 results, line by line

LKR MnJul–Sep 2026YoYQoQ
Revenue97,312+38.3%+5.7%
Gross Profit2,471−56.9%−34.8%
GP Margin2.5%−5.6 pts−1.6 pts
Operating Profit(296)To lossTo loss
OP Margin−0.3%−3.9 pts−1.5 pts
Profit Before Tax1,379−62.6%−33.4%
Profit After Tax963−67.5%−37.0%
PAT Margin1.0%−3.2 pts−0.7 pts

YoY against the same quarter a year ago. QoQ against the previous quarter.

What drove it

  • 01
    Cost of Sales grew faster than Revenue

    Cost of Sales rose 46.8% YoY, or LKR 30.2 Bn, more than the LKR 27.0 Bn rise in Revenue. Gross Profit fell to LKR 2.47 Bn, from LKR 5.73 Bn a year ago and LKR 3.79 Bn last quarter.

  • 02
    Finance Income carried the quarter

    Finance Income of LKR 1,758 Mn was 128% of Profit Before Tax of LKR 1,379 Mn, as Operating Profit of LKR 2,501 Mn a year ago became an Operating Loss of LKR 296 Mn.

  • 03
    Operating Cash Flow turned negative

    In the first half, April to September, Operating Cash Flow was −LKR 5,398 Mn against LKR 17,383 Mn a year earlier. Trade Receivables rose LKR 8.0 Bn and Trade Payables fell LKR 4.8 Bn, more than absorbing an LKR 8.2 Bn fall in Inventories.

  • 04
    LKR 53.3 Bn of Net Cash and Investments

    At 30 September 2026, about LKR 100 a share against a share price of LKR 124.75. The company has no long-term debt.

Valuation at LKR 124.75

8.55xPrice to EarningsLKR 124.75 ÷ LKR 14.60 EPS, last 12 months
0.72xPrice to BookLKR 124.75 ÷ LKR 172.53 Net Asset Value per share
2.3xEV / EBITDAEnterprise Value ÷ last 12 months’ EBITDA
4.01%Dividend YieldLKR 5.00 DPS (FY26) ÷ LKR 124.75

The shares trade at 72% of book value. The LKR 5.00 dividend was the first and final for FY26.

Three things to watch next quarter

  1. Gross Margin. Does it recover from 2.5% towards FY26’s 7.9%? Each point is worth about LKR 0.97 Bn a quarter.
  2. Trade Receivables. Does the LKR 8.0 Bn rise, to LKR 23.0 Bn, unwind?
  3. Finance Income. Does it hold near LKR 1.8 Bn a quarter while LKR 5.9 Bn of borrowings funds working capital?

The company

75.12% owned by Indian Oil273 fuel stationsSERVO lubricants

Capital Trust Securities. For information only. Not investment advice. Source: Lanka IOC PLC Interim Statement to 30 September 2026 (unaudited).