Fitch Ratings has affirmed Sri Lankan conglomerate Hayleys PLC’s National Long-Term Rating of ‘AAA(lka)’. The Outlook is Stable.
Fitch has also affirmed the company’s outstanding Rs.3 billion senior unsecured debentures.
Hayleys’ rating reflects its large operating scale and diversification across several prominent businesses. Its significant export earnings drive sustainable operating cash flow, despite temporary challenges in some segments. Fitch forecasts the company’s financial profile to remain commensurate with its rating over the next two years.
Fitch expects revenue to rise by about 7 percent in the financial year ending March 2025 (FY25), following a 10 percent decline in the prior financial year. This will be supported by the defensive segments, such as hand protection, agriculture and purification, which account for 28 percent of revenue. Up to 70 percent of purification segment revenue is from water purification and gold mining, with demand for both increasing due to the scarcity of drinking water and for gold as a safe haven.

Furthermore, a recovering domestic economy is reviving construction, tourism and retail demand, which bodes well for the construction material, leisure and consumer and retail segments, which comprise 22 percent of revenue. Cost reflective energy pricing will continue to drive demand for renewable energy sources, supporting the projects and engineering segment, at 5 percent of revenue.
Eighty percent of group EBIT is generated via eight verticals. Direct and indirect exports account for 54 percent of revenue, with only 30 percent coming from Europe and the US, indicating low exposure to slower-growth developed markets. 
Hayleys’ manufacturing locations are also diversified beyond Sri Lanka. Only 55 percent of its purification segment capacity is in Sri Lanka, with the rest in Thailand and Indonesia. The hand protection segment, which produces rubber gloves, also operates in Thailand, the world’s largest source of natural rubber.