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LRA upgrades Janashakthi Limited (JXG) to Investment Grade

Janashakthi Limited (JXG), the parent entity of the Janashakthi Group of Companies, announces a three-notch upgrade in its credit rating by Lanka Rating Agency (LRA) from BB- to BBB-. This upgrade signifies a shift from moderate risk to investment grade, reinforcing Janashakthi Group’s strength, stability, and sustained growth in the sectors it operates in.

Established in 1994, the Janashakthi Group has transformed into a financial conglomerate with a diverse presence across Insurance, Finance, and Investment Banking sectors. Serving as the principal holding company, it holds majority stakes in key subsidiaries such as Janashakthi Insurance PLC, Orient Finance PLC, and First Capital Holding PLC, all of which play strategic roles in the Group's success. Despite grappling with challenges in macroeconomic volatility, the Janashakthi Group has demonstrated resilience and adaptability. The Group’s strategic initiatives, combined with improved financial performance and enhanced capitalization indicators, have propelled the company towards this credit rating upgrade.

Key factors contributing to the upgrade include:

• Enhanced financial results and profitability, fuelled by diversified income streams and improved returns from subsidiaries: The Group’s net profit stood at LKR 7 billion in 9MFY24 compared to a net loss of LKR 1.7 billion in 9MFY23, indicating a profound growth of ~348% and ~518% from the same period last year, respectively.

• Reduction in debt levels and bolstering of leverage indicators, supported by strong dividend inflows and reinforced profit retention strategies.

• Favourable market conditions, including declining interest rates, resulting in diminished financing costs and amplified margins.

Ramesh Schaffter, Managing Director/Group CEO of Janashakthi Group, remarked, "We're truly pleased with the credit rating upgrade. It demonstrates our commitment to financial prudence, management, and strategic growth. Our confidence in our business model, subsidiaries, and resilience is reaffirmed by this upgrade, showcasing our ability to consistently deliver value to our stakeholders." He further added, “Building upon this momentum, we will continue to fortify our financial position, elevate our governance standards, and ensure that we not only meet but exceed the expectations of our investors, customers, and partners.”

Group Chief Financial Officer, Thanushka Jayasundera emphasized, “We are optimistic about our long-term trajectory. Several factors have contributed to the financial robustness of Janashakthi Group, notably the healthy dividend inflows from prominent subsidiaries within our Group. Moving forward, our strategic focus will be on sustaining and enhancing our financial performance through diverse income streams, including a potential listing on the CSE. We’re also aggressively looking at expanding our Group both locally and internationally at the moment.”

The Group’s investment portfolio consists of a balanced mix of multiple ventures, reflecting a prudent, diversified investment strategy. The final authority for Janashakthi Group’s investment decisions lies with the Board of Directors. Furthermore, Janashakthi Group operates under a well-defined organizational framework, featuring eight principal pillars reporting directly to the Group Managing Director/CEO. These pillars include Legal, Marketing, IT, Human Resources, Administration, Finance, Internal Audit, and Mergers & Acquisitions. They provide innovative solutions to subsidiaries, creating efficiencies within the group.

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