Home / Business/ ICRA Lanka reaffirms [SL] A+ Rating with Stable Outlook for JAT Holdings

ICRA Lanka reaffirms [SL] A+ Rating with Stable Outlook for JAT Holdings


Comments / {{hitsCtrl.values.hits}} Views / Friday, 12 October 2018 00:00


ICRA Lanka Ltd., a subsidiary of ICRA Ltd., group company of Moody’s Investors Service, has reaffirmed the issuer rating of [SL] A+ with a Stable Outlook for JAT Holdings Ltd. 

JAT Holdings, one of Sri Lanka’s most successful and diversified conglomerates, celebrates 25 years of being a pioneer and innovator in the paints, furnishing, property, agri and technology sectors. Several factors including the Company’s financial performance, brand strength and future prospects, were taken into consideration for the affirmation of the rating.

The company’s strong brand name and dominant market position in the Sri Lankan and Bangladeshi wood coating industry, especially in the water-based, PU and UV wood coating segments, played a key role. In 2017, JAT became the largest global distributor for the Sayerlack brand of wood coatings, which is owned by Sherwin Williams USA, the largest coating company in the world. JAT Holdings has distribution rights for Sayerlack for the entire South Asian region. 

JAT also recently tied up with world-renowned brands such as SEA Bauformat Kitchens from Germany and Armstrong Ceilings from USA while recently acquiring the ‘Harris’ brushes and roller brand – the market leader in the Sri Lankan paintbrush segment. Diversifying into the premium interior design segment, the Company provides furnishing solutions in the premium real estate sector in Sri Lanka and has noticeably gained a leading market share.  

ICRA Lanka also took note of JAT’s diversification into fast-growing export markets, such as India, Bangladesh and Maldives. JAT has become the leading player in the Bangladesh wood coating segment by distributing Sayerlack products through its strong distribution network and effective marketing initiatives for over 15 years. The management has recognised India, Maldives and Pakistan as more promising growth opportunities and has continued its significant brand building efforts to penetrate into these markets. 

Over the past few years, the Company’s operating profit margins have moderated noticeably due to cost increases (including sustained rupee depreciation), increased competition with higher price discounts, and higher revenue contribution from the projects segment, which has relatively lower profit margins. During FY2018, the impact on the operating profit margins were relatively high due to the compound effect of the above mentioned factors amidst the weaker macro-economic outlook that prevailed during this period. JAT’s strong brand equity and the market leadership, however, have enabled the Company to pass on partly any additional cost increases despite the growing competition.

The rating also considers positively the Company’s recent diversification into innovative new product categories such as ceiling products, sand paper, Brush Master paintbrushes, fire resistant paints etc., which have been posting volume growth over the past few years. JAT envisages itself as a leading player in the broader interior and living spaces market and has continued with its tie-ups with premium international brands such as Herman Miller, Armstrong, etc. 

Incorporated in 1993, JAT Holdings Ltd. has become a household name, trusted for its innovation, quality and reliability. 


Share This Article


DISCLAIMER:

1. All comments will be moderated by the Daily FT Web Editor.

2. Comments that are abusive, obscene, incendiary, defamatory or irrelevant will not be published.

3. We may remove hyperlinks within comments.

4. Kindly use a genuine email ID and provide your name.

5. Spamming the comments section under different user names may result in being blacklisted.

COMMENTS

Today's Columnists

Overcoming the crisis: The second freedom struggle

Friday, 14 December 2018

The crisis that has been developing in Sri Lanka, manifesting itself in varied forms at different times since independence, has now taken the form of a constitutional crisis, threatening the survival of the Sri Lankan State. Regardless of the Court


Getting more women in the workforce

Friday, 14 December 2018

The current female labour force participation in Sri Lanka is around 36%. This means that a disproportionate majority of women still remain outside the labour market, with limited or no access to wages, pensions and other benefits tied to gainful emp


Our chit-chat – Can conversations make a nation?

Thursday, 13 December 2018

We are living through fascinating times dominated by online conversations with offline taking backstage. From the Arab spring to Yellow vests in France, the online has proven its potential and power – be it destructive or constructive! A reading o


The vote, the verdict, and the TNA ‘backstop’: Beyond ’56

Thursday, 13 December 2018

“Leader of PLOTE and TNA MP D. Dharmalingam …stated that he believes that Ranil Wickremesinghe has handed in a written assurance of several promises. …The promises are said to include agreements on constitutional amendments, freedom for politi


Columnists More