Teejay Lanka explores opportunities to enter Bangladesh and Africa


Knit fabric maker Teejay Lanka PLC is currently exploring opportunities to expand its operations to Bangladesh and Africa, while investing further in its existing plants in Sri Lanka and India to add capacity, as the company aspires to achieve a consolidated revenue of US $ 300 million in the financial year ending 2023. 

Teejay recorded its highest quarterly revenue of Rs.9.77 billion for its fourth fiscal quarter ended on March 31, 2021, recording a 40 percent growth year-on-year (YoY), while the earnings surged 80 percent YoY to Rs.760.9 million, due to the recovery in global demand amid the easing of virus restrictions. 

For the full financial year ended on March 31, 2021, the company reported revenues of Rs.31.85 billion or US $ 171.58 million, down slightly from the previous year, due to the initial disruptions caused by the pandemic. 

According to First Capital Research, which managed to obtain more information about the company’s future trajectory, apart from parsing its financial data, Teejay Lanka is “exploring potential new opportunities in Bangladesh and Africa”, in addition to investments in its Indian plant expansion in the ongoing financial year. 


The company recently indicted plans to expand its production capacity of its Indian plant to 20 tonnes and according to First Capital, the company is likely to invest up to US $ 26 million during the ongoing financial year ending in March 2022. 

This is amid the company’s continuing plant modernisation programmes in Sri Lanka as well in India. All these measures are aimed at expanding the company’s daily capacity to 105 metric tonnes, from the existing 75 metric tonnes, First Capital said. 

The research firm does not expect the possible loss of the GSP Plus concession to have a major impact on Teejay Lanka, as it has the capability to handle orders through India, which may continue to enjoy the duty concession. 

Further, the company has an upside from the depreciation of the rupee against the dollar, as a significant amount of the company’s revenue is generated in foreign currency.  First Capital expects the rupee to shed its value by 12 percent in 2021, touching Rs.205-215 against the US dollar.  While the rise in yarn prices, the key input in the textiles manufacturing industry, are expected to put pressure on the company’s margins, First Capital expects higher focus towards the high margin synthetic fabric and the increased capacity utilisation in the existing plants to preserve margins in FY22.  As a result, First Capital estimates the company to sustain its current gross margins at 12.5 percent in FY22, before improving to 12.8 percent in FY23 amid expansion.


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