eChannelling PLC Financial Summary and Investment Analysis

Executive Overview

eChannelling PLC operates a digital healthcare-access platform connecting patients with doctors, hospitals, diagnostic services, pharmacies, home-care services and other healthcare providers through web, mobile and related digital channels. Its portfolio includes doctor channelling, eHospital audio/video consultations, eChat, ePremium, eHome Care, ePharmacy and eLab.

The company entered a stronger growth phase during 2025 and accelerated further in H1 2026. CY2025 revenue reached a record LKR 295.82 Mn, up 15.6% YoY, while net profit increased 19.4% to LKR 38.14 Mn. H1 2026 strengthened materially: revenue rose 28.7% YoY to LKR 171.35 Mn and net profit almost doubled, increasing 96.5% to LKR 31.66 Mn.

The financial structure remains unusually liquid and largely internally funded. At 2026-06-30, cash and short-term investments totaled LKR 516.10 Mn, equivalent to approximately 65% of total assets. However, current liabilities increased sharply during H1 2026, mainly through trade payables, reducing the current ratio from 4.42 at CY2025 to approximately 3.45.

Periods covered: Q3 2023-Q2 2026, CY2023-CY2025, plus market information through 2026-08-14. CY2025 financial statements are audited; Q1-Q2 2026 figures are provisional and subject to audit.

Financial Performance

Revenue and Profitability Trends

The major inflection occurred from Q3 2025. Q3 2025 revenue increased 19.8% YoY and net profit 128.8%, followed by 28.3% YoY revenue growth in Q4 2025. Q1 2026 revenue increased 29.3% YoY, while net profit jumped 77.8%.

Q2 2026 remained strong against the prior year, with revenue up 28.2% and net profit up 70.8%, although sequentially revenue fell 1.9% and profit declined 43.5% from an exceptionally profitable Q1.

CY2025 operating profit rose 68.4% to LKR 27.02 Mn. Management attributed revenue growth principally to onboarding new hospitals and agents, higher web/mobile usage, increasing transaction volumes, digital-payment adoption and customer retention.

Finance income remains important: CY2025 finance income was LKR 28.48 Mn, slightly above operating profit, reflecting the company's large investment balances.

Balance Sheet Analysis

CY2025 showed major balance-sheet strengthening: liabilities fell 30%, equity increased 8.6%, the bank overdraft was eliminated and cash more than doubled.

H1 2026 assets expanded 16.3% from CY2025. Trade payables increased sharply from LKR 110.14 Mn to LKR 188.67 Mn, explaining much of the increase in liabilities and decline in the current ratio. Nevertheless, liquidity remains substantial.

Cash Flow Analysis

*CY2024 cash-flow closing cash includes the overdraft presentation.

H1 2026 operating cash generation increased dramatically, helped by higher profitability, receivable movements and a LKR 78.53 Mn increase in trade payables. Therefore, not all of the cash-flow improvement represents recurring earnings conversion.

No shareholder dividend per share was reported across the reviewed interim periods; retained earnings continue to fund growth.

Key Financial Ratios and Growth Indicators

• CY2025 ROE: approximately 7.7% using average equity.
• CY2025 ROA: approximately 5.5% using average assets.
• Gross margin: improved from 77.7% in CY2024 to 77.9% in CY2025 and approximately 80.0% in H1 2026.
• Operating margin: improved from 6.3% in CY2024 to 9.1% in CY2025.
• EPS: LKR 0.26 in CY2024 → LKR 0.31 in CY2025 → LKR 0.26 for H1 2026 alone.
• NAV/share: LKR 3.89 → LKR 4.23 → LKR 4.51.
• CY2025 intangible assets increased 146.4% to LKR 2.84 Mn, reflecting increased software/platform investment.
• The business operates without conventional interest-bearing bank borrowings, although lease liabilities remain.

Economic and Market Context

Management describes operating through macroeconomic volatility, inflationary cost pressure and changing consumer spending conditions. The digital-healthcare environment simultaneously benefits from increasing smartphone penetration, mobile-first behaviour, digital payments and demand for convenient remote healthcare access.

The platform's high fixed digital infrastructure component creates scalability potential as transactions increase, although competition, technology evolution and regulatory requirements are becoming more significant.

Future Potential and Outlook

Management's growth roadmap includes:

• AI-enhanced customer interaction, intelligent recommendations and automated assistance.
• Predictive scheduling and increasingly personalized healthcare journeys.
• Expansion of hospital, diagnostic, payment and other ecosystem partnerships.
• Premium membership/subscription services through eSubscription.
• Expansion of eHomecare, launched with Golden Years Care on 2025-12-15.
• eMindCare remote mental-health consultations.
• Diversification into non-traditional healthcare and selected non-health digital services.
• Further cloud-based infrastructure optimization.
• Exploring strategic partnerships and market expansion using the company's internally generated equity and liquidity.

These initiatives create optionality, but their commercial contribution remains to be proven.

Risks and Challenges

Principal risks identified include:

• Cybersecurity/data privacy: cyberattacks, ransomware, phishing, unauthorized access, data leakage and third-party exposure.
• Regulation: PDPA compliance, healthcare regulation, consent management and evolving digital-governance requirements.
• Strategic competition: new entrants, substitute platforms and rapid technology changes.
• Operational dependency: platform uptime, transaction continuity, infrastructure failures and third-party dependencies.
• Financial: receivable/default risk, treasury exposure, inflation and reduced discretionary healthcare expenditure.
• Human capital: specialist talent attrition, digital-skills shortages and inflation-driven retention pressure.
• Concentration: Mobitel (Pvt) Ltd controls 87.59% of shares, producing a relatively small free float.
• Profit composition: investment/finance income contributes materially to total earnings, so bottom-line profitability is not entirely generated by healthcare operations.

Mitigations include vulnerability assessments, layered security, access controls, backups, external security reviews, PDPA processes, treasury controls and enterprise-risk oversight.

Shareholder and Corporate Information

At 2026-06-30:

• Mobitel (Pvt) Ltd: 106,974,618 shares / 87.59%.
• Public holding: 15,156,797 shares / 12.41%.
• Public shareholders: 2,134.
• Float-adjusted market capitalization: LKR 228.87 Mn.
• All listed directors reported zero direct shareholdings.
• H1 2026 trading range: LKR 14.00-LKR 17.90; 2026-06-30-period last traded price: LKR 15.10.
• Pal market context shows a LKR 16.00 close on 2026-08-14, versus LKR 13.50 on 2026-03-24, a +18.52% 90-session return.

Investment Decision Indicators

Strengths

• Strong acceleration in revenue and earnings through H2 2025-H1 2026.
• High and improving gross margins near 80%.
• Exceptional liquidity and no conventional bank debt.
• Strong operating cash generation.
• Rising NAV/share and retained earnings.
• Established digital-healthcare ecosystem with significant new-service optionality.

Weaknesses

• Finance income remains a material component of profits.
• Administrative expenditure accelerated during Q2 2026.
• H1 2026 cash flow benefited substantially from higher trade payables.
• No dividend distributions reported in the reviewed periods.
• Extremely concentrated controlling ownership and limited public float.

Opportunities

• AI, predictive scheduling, subscriptions and personalized healthcare.
• eHomecare/eMindCare expansion.
• Additional hospitals, diagnostics and digital-payment partnerships.
• Monetization of the large existing digital customer ecosystem.

Threats

• Cybersecurity or privacy incidents.
• Regulatory changes.
• New digital-health competitors.
• Cost inflation and technology/talent expenses.
• Failure of new services to generate adequate returns.

Overall Assessment

The reports show a company moving from moderate growth into a materially stronger operating phase. H1 2026 revenue increased 28.7% and net profit 96.5% YoY, while liquidity, equity and NAV remain strong. The key analytical question is whether the acceleration in core operating earnings can persist independently of finance income and working-capital movements.

The financial position provides substantial capacity to invest without leverage, but concentrated ownership, reliance on treasury income and execution risks around new digital services remain important considerations. The available evidence therefore supports evaluating eChannelling primarily on the sustainability of its recent operating-growth trajectory rather than on its balance-sheet strength alone. No BUY/SELL/HOLD recommendation is issued.