“Our first-half performance reflects the strength of our diversified business model and our ability to deliver growth across all three sectors,” said Sunshine Holdings PLC Group CEO Shyam Sathasivam, as the group reported a 44.3% increase in profit after tax for the six months ended 30 September 2026.
Sunshine Holdings recorded consolidated revenue of Rs.40.2 billion during the first half of FY2027, up 24.4% year-on-year. Profit after tax (PAT) reached Rs.3.7 billion, supported by growth across its Healthcare, Consumer and Agribusiness sectors.
The group also reported stronger performance in the second quarter. Revenue increased by 32.0% year-on-year to Rs.21.6 billion, while profit after tax rose by 82.4% to Rs.2.3 billion.
Healthcare remained the largest contributor to group revenue, accounting for 49% of the total. Consumer contributed 37%, while Agribusiness accounted for the remaining 14%.
However, the growth in revenue came alongside pressure on gross profit and operating margins. Gross profit increased by 11.7% to Rs.11.5 billion, while the gross profit margin declined to 28.7% from 31.9% in the corresponding period last year.
Sunshine Holdings attributed the lower margin mainly to 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% to Rs.6.1 billion. However, the EBIT margin declined to 15.1% from 17.0% in 1HFY26.
Higher net finance income and a lower effective tax rate supported the improvement in overall profitability. As a result, the group’s PAT margin increased to 9.2% from 8.0% in the previous year.
Healthcare remains the largest business segment
Sunshine Holdings’ Healthcare sector recorded revenue of Rs.19.6 billion during the first half, an increase of 13.3% year-on-year. Growth accelerated in the second quarter, with revenue rising by 20.5%.
However, the sector’s EBIT margin declined to 11.2% from 13.1% in 1HFY26. The company linked this decline mainly to regulated price reductions and the weaker rupee’s impact on imported products.
The Pharmaceutical Agency segment recorded a 24.0% revenue contraction. This was mainly due to a change in its operating model compared with last year, lower shipments from certain principals and stock shortages linked to regulatory factors.
Other healthcare businesses reported mixed results. Medical Devices revenue increased by 19.9%, while Healthguard Distribution grew by 4.1%. Healthguard Pharmacy remained broadly stable.
Lina Manufacturing, the group’s pharmaceutical manufacturing business, recorded revenue growth of 35.1%. Deliveries against government orders supported this performance.
Sunshine Holdings also advanced its plans to expand local pharmaceutical manufacturing. During the period, it finalised a joint venture agreement with India’s Zydus Lifesciences Limited.
The joint venture signed an agreement with the Board of Investment of Sri Lanka to develop a Good Manufacturing Practice (GMP)-compliant oral solid dosage manufacturing facility at the Horana Export Processing Zone.
In a separate development after the reporting period, Sunshine Healthcare Lanka Limited acquired a 21.92% stake in Digital Health (Private) Limited, the operator of the Doc990 platform, in October 2026.
This investment adds digital healthcare services to the group’s existing pharmaceutical agency, distribution, manufacturing and retail operations.
Consumer business records strong revenue growth
The Consumer sector delivered the group’s fastest revenue growth during the first half. Revenue increased by 53.5% year-on-year to Rs.15.0 billion.
This growth mainly came from the consolidation of JAPC and a recovery in the tea export business. Excluding JAPC, Consumer revenue increased by 13.0%, supported by branded tea and tea exports.
The sector’s EBIT margin also improved to 8.0% from 7.8% in the corresponding period last year.
Within the sector, the Branded Tea business recorded revenue growth of 5.6%. Watawala Thei supported this increase, while Zesta continued to operate in a highly competitive premium tea market.
The Confectionery business reported a 2.2% increase in revenue. Growth in gums and wafers helped offset declines in toffee and candy categories.
Tea exports recorded a stronger recovery. Revenue increased by 25.4% during the first half, while second-quarter revenue grew by 60.9% year-on-year.
Additional business from key customers and higher sales of value-added tea products supported this performance.
Meanwhile, JAPC’s spice export revenue increased by 28.6%. Demand across its key product categories supported the growth. Its consolidation also expanded Sunshine Holdings’ presence in the spice export business.
Agribusiness benefits from oil palm growth
The Agribusiness sector, represented by Watawala Plantations PLC, recorded revenue of Rs.5.6 billion during the first half. This was an increase of 7.2% year-on-year, mainly supported by the oil palm business.
Oil palm revenue grew by 9.1% to Rs.5.0 billion. Higher own-crop production supported the increase.
However, growth slowed in the second quarter due to lower bought-crop availability and reduced oil extraction rates.
The Dairy business recorded revenue of Rs.561.1 million, down 2.9% year-on-year. Higher selling prices partly offset lower milk sales volumes.
The business also continued to face higher effluent management costs. However, its operating performance improved during the second quarter.
Agribusiness recorded an EBIT margin of 47.8%, compared with 49.1% in 1HFY26. Higher operating costs in the oil palm business contributed to the decline.
During the period, Sunshine Holdings increased its stake in Watawala Plantations 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.
Focus on manufacturing, digital healthcare and exports
Commenting on the group’s performance, Sathasivam also highlighted the challenges affecting margins and the investments planned across its businesses.
“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.”
The first-half results show growth across all three business sectors, although profitability margins faced pressure in Healthcare and Agribusiness.
Sunshine Holdings’ next phase will include further work on local pharmaceutical manufacturing, digital healthcare services and export-oriented businesses, alongside its existing operations in Consumer and Agribusiness.
Last modified: November 9, 2026
