Lion Brewery Ceylon

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As hyperinflationary dynamics subside, the residual effect has unveiled a large dislocation in valuations. The risk premium attached to overall market valuations to diminish with a potential IMF agreement imminent. With the expansion in bottom line t...

Despite economic crisis domestic FMCG/R were beneficiaries of hyperinflation. In early 2023, inflation pressures are easing and supply-side issues are moderating. A recovery in key sectors of the economy will aid consumption growth.

Price increases offset volume loss in 1Q; poised for a recovery in 2H FY23E. Near-term margin pressure to be offset by improving volumes in 2H. We use a 3-stage DCF model and arrive at a fair value of LKR 750.00/share.

We value LION at a revised TP of LKR 655/share (-6.4% to old; +19.1% upside, +20.4% TSR). Revenues came in at LKR 10.6bn, down 28.5% QoQ (+63.5% YoY) as travel restrictions resulted in the closure of liquor outlets for an extended period. Looking ahe...

We maintain our target price of LKR 700/share and, incorporating a FY22E dividend of LKR 11.00/share, arrive at a total return of +29.3%. Looking into FY22E, we expect a rebound in economic activity and income levels to translate into strong volume g...

We expect the consumer sector to see a steady recovery, supported by a gradual rebound in economic activity and income levels. Counters exposed to food retailing and FMCG food will remain at the forefront of sector growth, followed by demand for home...