JAT gets SL A+ rating with Stable Outlook for sixth consecutive year

ICRA Lanka Ltd. has reaffirmed that JAT Holdings PLC remains worthy of the agency’s coveted [SL]A+ Rating with a stable outlook. 

JAT Holdings PLC has now retained this prestigious Issuer Rating for the sixth consecutive year, attesting to the company’s solid financial position and the respect it commands amongst the investment community. 

ICRA Lanka is the premier investment rating agency in Sri Lanka affiliated to Moody’s.

JAT Holdings PLC, the premier Sri Lankan multinational manufacturer of wood coating products, and diversified conglomerate, recently wooed investors through a successful oversubscribed IPO and listing on the Colombo Stock Exchange. 

JAT Holdings PLC Founder and Managing Director Aelian Gunawardene said: “The [SL]A+ rating from ICRA is a very prestigious rating that is coveted by the corporate community and the standards required to obtain it, are exceptional, rigorous and thorough. JAT Holdings PLC having achieved this rating continuously for six years is a clear indicator of the company’s strength, stability and position. It is reflective of our experienced management team, our dominant market position for wood coatings in Sri Lanka, our exceptional brand equity and the strength and stability of our financial position. We are very proud to have retained this rating for six consecutive years and remain committed to continuing our excellent efforts to serve our customers, investors and the nation.” 

JAT Holdings PLC enjoys the position of undisputed market leader in the wood coatings sector, despite competition from new and existing multinational companies, due to its stringent quality standards and the resulting trust and popularity the brand enjoys. Today, JAT is synonymous with premium water-based wood coatings in Sri Lanka, due to the strong brand equity the company has built and the unparalleled quality provided by its “Sayerlack” brand.

JAT Holdings PLC also enjoys dominance in the brush market, with its brand ‘Harris’ and in the luxury kitchens market with its brand ‘SEA Bauformat’. As a result, the company is frequently associated with many landmark developments and megaprojects across Sri Lanka. 

As a result of its market-leading role and commitment to innovation, JAT Holdings enjoys a solid financial position. In FY2021, the company’s operating profit margin (OPM) improved to 14.1% against 13.8% in the year prior, supported by a higher revenue share from wood coatings, which enjoys higher margins. In Q1 of FY2022, the company’s OPM further improved to 14.9% on account of improved management efficiencies.

JAT Holdings PLC’s capital structure also remains comfortable on account of healthy, internally generated funds and its relatively low level of debt. The Rs. 1.5 billion raised through its IPO in July 2021 will further enable the company to fund capex while maintaining its healthy capital structure over the medium-term. The company’s debt indicators remain healthy amidst low debt levels and comfortable operating margins, with its debt profile skewed towards short-term working capital loans, while being free of term debt at the stand-alone level.

JAT Holdings PLC’s future strategic expansion plans and investments in Sri Lanka, South Asia and Africa are tipped to help maintain the financial strength and stability of the company over the long-term. Furthermore, JAT has also commenced manufacturing operations in Bangladesh, further boosting its already established presence in the country.