Sunshine Holdings profit falls despite 8% revenue growth as healthcare margins tighten

Group CEO Shyam Sathasivam

Sunshine Holdings’ latest nine-month results show a group still growing revenues but facing a more complicated earnings picture beneath the headline numbers.

The diversified conglomerate reported a consolidated revenue of Rs.48.9 billion for the nine months to December 31, 2025, up 8.1 percent year-on-year, with healthcare continuing to dominate the topline. 

However, profit after tax fell 8.8 percent to Rs.4.3 billion, highlighting margin pressure in its largest business segment, even as the smaller units delivered stronger operating gains. The group EBIT rose only marginally, up 1.2 percent to Rs.7.5 billion, suggesting that revenue expansion is no longer translating into the same level of profitability as in the previous year.

Healthcare, which contributed more than half of the group revenue (55.4 percent), grew sales 9.3 percent to Rs.27.1 billion, supported by a steady demand across pharmaceutical distribution, agency operations and retail pharmacy. 

Growth was particularly strong in Healthguard Distribution, where revenue jumped nearly 25 percent, on the back of a revised operating model and new partnerships. However, the sector’s profitability was weighed down by weaker manufacturing performance and pricing pressure, following the introduction of a pharmaceutical pricing mechanism. Sunshine also cited lower government purchase orders in 2025 compared with the prior year, an important drag, given the scale of the segment.

Consumer brands delivered a flatter performance, with revenue rising only 0.9 percent to Rs.14.5 billion. 

Domestic branded tea and confectionery sales improved, supported by stronger consumer sentiment and distribution expansion but export revenues slipped 4.7 percent, despite the higher volumes, pointing to an unfavourable sales mix. 

The confectionery business was also disrupted in the third quarter by Cyclone Ditwah, underlining the vulnerability of consumer-facing operations to external shocks.

Agribusiness emerged as the standout contributor to the earnings momentum. The sector revenue climbed 20.6 percent to Rs.7.3 billion, driven by higher palm oil prices and volumes.  Profitability strengthened sharply, with the agribusiness EBIT margin expanding to 45.6 percent, from 37.9 percent a year earlier, reflecting both improved palm oil performance and ongoing cost efficiencies across the estate operations. 

Dairy, however, remained a weak spot, with revenue declining 8.1 percent, due to lower production and selling prices. Strategically, Sunshine is also positioning for longer-term portfolio expansion. In January 2026, it announced plans to acquire a controlling stake in Joint Agri Products Ceylon, adding greater exposure to export-oriented, value-added categories such as spices and coconut-based products.