• Commands dominant market positions in the wood coatings, paint & accessories, and interior living spaces market segments
• Its core business is wood coatings where the company has sustained a commanding market position for over 20 years
• Has the competitive advantage of being the sole partner for Sayerlack wood coating products for selected countries in Asia and Africa
• JAT has managed to secure a significant market share with an entrusted brand equity through its excellence
Expansions will diversify the Group’s revenue base
Expanding JAT’s footprint across South Asia, the company launched a new manufacturing plant in Bangladesh during the FY22 as such we see
significant growth potential in the Bangladesh market, going forward. Backward integration at domestic and Bangladesh plants to enhance
potential export revenues underpinned by prudent cost mitigation strategies.
• Adverse impact on the construction industry to lessen
According to the CBSL the inflation rate is expected to slow down with the IMF bailout. As such we expect the interest rates to come down in
4QCY23 which may lead to a positive growth in the construction sector. Therefore, we expect construction driven sales volume to increase in FY24E
• Innovations leading to further enhance the market share
JAT’s brilliant white emulsion exterior and interior wall paint has gained a share of over 15% in the Brilliant white market and 7% in the total
decorative paint market. Further, an e-commerce-based distribution model has enabled JAT to rapidly capture market share. The company has also
commenced a R&D facility in Sri Lanka which will further intensify the Group’s innovation capability and enhance margins locally and in Bangladesh
• Healthy Balance sheet position leading for strategic investments
A LKR 302 million raised from the IPO proceeds will be utilized to set up new manufacturing facility in East Africa during FY24 with the intention of
diversifying operations.
• JAT’s core products are driven mainly by the the performance of
the construction sector. Thus poor economic conditions such as
LKR deprecation, high interest rates and import restrictions have
impeded the overall performance.
• The decorative paints industry consists of paints for interiors
and exteriors and includes emulsion and enamel paints.
• The market for wood coatings is a niche market. Protective
coatings and wood coatings are used normally on an industrial
scale usually with larger building projects and complexes.
• We expect the economy to recover gradually given much needed
fiscal discipline, structural reforms and an IMF bailout. Lower
interest rates in the future will provide tailwinds for construction
sector growth.
Revenue is projected to grow at a 5-year CAGR of 10%
from FY23 – FY27. Construction sector performance and
inflation are considered major revenue drivers
• Presently, the higher interest rates have subdued
performance in the Construction sector in Sri Lanka.
However, the Construction sector is expected to revive
going forward, which is expected to enhance the demand
for paints and wood coatings.
• JAT has adopted continuous innovations and off-shore
diversification strategies which would contribute towards
improved revenue growth.
Target Price For JAT is Rs 24 .