Colombo, Sri Lanka – August 31, 2026 – Kapruka Holdings PLC (CSE: KPHL.N0000), Sri Lanka’s pioneering e-commerce giant, today announced its Annual Report for the financial year ended March 31, 2026, marking a significant turnaround with a definitive return to profitability. The report, themed “The Year of the Inflection — Profitable. Compounding. AI Native,” highlights a strategic restructuring that has positioned the company for sustained, technology-led growth.
The Group reported a robust performance for FY26, signaling the successful culmination of a two-year rebuilding phase. Key financial indicators show a dramatic shift, underscoring Kapruka’s enhanced operational efficiency and strategic re-prioritization towards asset-light, high-margin revenue streams.
Key Financial Highlights: A Resurgent Performance
- Revenue Growth: Group revenue expanded by a notable 16.6% year-on-year, reaching Rs 1.93 billion (FY25: Rs 1.65 billion).
- Gross Profit Surge: Gross profit saw a significant 34.3% increase, outpacing revenue growth and elevating the gross profit margin to 38.5%. This indicates a positive shift in the company’s margin mix.
- Operating Profit Turnaround: The Group swung from an operating loss of Rs 146.9 million in the prior year to a positive operating profit of Rs 4.6 million in FY26.
- Return to Profit Before Tax (PBT): Kapruka recorded a PBT of Rs 27.1 million, a substantial recovery from a loss of Rs 117.0 million in FY25, representing a swing of Rs 144 million in twelve months.
- Earnings Per Share (EPS): EPS turned positive at Rs 0.07, reversing a deficit of Rs (0.87) per share in the previous year.
- Share Price Re-rating: The company’s share price re-rated threefold over the year, from Rs 7.90 to Rs 23.80, with market capitalization rising from Rs 1.30 billion to Rs 3.91 billion.
Dulith Herath, Chairman & CEO of Kapruka Holdings PLC, commented, “We have rebuilt the engine. The runway ahead is long, and the operating leverage embedded in our model is only beginning to show up in the numbers. FY26 is the first year in which all of that work shows up as a number, in the same direction, on every line.”
AI-Native Transformation: The New Operating System
A cornerstone of Kapruka’s inflection is the deep integration of Artificial Intelligence (AI) as a core operating layer, rather than a mere feature. This strategic shift aims to fundamentally alter the company’s unit economics by automating recurring tasks across various functions.
Kapruka’s AI strategy encompasses:
- Customer Service: Automating Tier-1 ticket triage and resolution, improving chat and voice deflection.
- Product Discovery: Enhancing semantic search, recommendations, and personalized gift discovery.
- Content Generation: Streamlining the creation of listing copy, image alt text, marketing collateral, and partner brief packs.
- Supply Chain Optimization: Improving demand forecasting, restock signals, courier routing, and exception management.
- Back-Office Automation: Automating reconciliation, settlement, tax classification, and invoice matching.
The company is on track to achieve 40% back-office automation within the next several quarters, which is expected to drive significant operating leverage by reducing fixed costs and enabling revenue scaling without proportional headcount increases. “Most ‘AI in annual report’ is positioning. We have tried hard not to do that. What we have done is rebuilt how recurring work happens — and the cost of doing it falls every quarter,” stated Mr. Herath.
Three Compounding Revenue Engines Fueling Growth
FY26 marked the first year where all three of Kapruka’s distinct revenue engines operated in parallel, each contributing to growth and diversification:
- Partner Central (Marketplace): This asset-light model allows third-party sellers to leverage Kapruka’s customer base, logistics, and payments infrastructure, earning the company a commission without inventory risk. Its scaling contributed significantly to the 34% gross profit expansion.
- Services Platform: A new vertical launched this year, offering bookable digital services (e.g., IT support, professional services, in-home help) to Kapruka’s existing customer network. This high-margin, recurring revenue stream capitalizes on two decades of accumulated trust.
- Cross-Border Operations: Through Kapruka USA LLC and Kapruka Global UK Ltd, the company acts as an e-distributor for Sri Lankan brands on Amazon US, UK, and Canada. This segment generated Rs 243 million in revenue (up 30% YoY), providing hard-currency revenue and a structural FX hedge for the Group.
Strategic Outlook and Asymmetric Upside
Kapruka believes it is uniquely positioned at the intersection of three powerful trends: the ongoing digitization of Sri Lankan commerce, growing global demand for authentic Sri Lankan products, and the rapidly falling cost of AI. The company’s enhanced balance sheet, diversified revenue streams, and AI-powered operational model contribute to an “asymmetric upside” case, where downside risks are bounded by completed restructuring, while upside potential compounds with each quarter.
Further initiatives include the commencement of an electric vehicle (EV) fleet conversion program, aimed at insulating the cost base from fuel and FX volatility, and prudent capital allocation. Approximately 90% of IPO proceeds have been deployed, with remaining funds earmarked for strategic growth initiatives.
The Annual Report 2025/26 reflects Kapruka Holdings PLC’s commitment to transparent governance and adherence to CSE Listing Rules and Sri Lanka Accounting Standards (SLFRS/LKAS), including its first formal sustainability-related financial disclosure in accordance with SLFRS S1 and S2.
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