Fitch assigns Hayleys Fentons first-time national rating of 'A+(Ika)'; outlook stable

FITCH Ratings has assigned Hayleys Fentons Ltd., (HFL) a National Long-Term Rating of A+(Ika)'. The outlook is stable.

- 

The rating reflects HFL's leading market share in domestic rooftop solar panel sales and installation, which drove cash flow in the financial year ending March 2025 (FY25), alongside slowing growth amid regulatory risks. Diversification into power generation over the next few years carries execution risk but could enhance revenue visibility, subject to the weak credit quality of the sole offtaker, Ceylon Electricity Board (CEB, A(lka)/Stable).

HFL's A+(Ika) rating comprises its standalone credit profile of ‘a(lka)' and a one-notch uplift for support from its stronger parent, Hayleys PLC (AAA(lka)/Stable), reflecting moderate operating incentives but low legal and strategic incentives.

Fitch issued the following drivers for its rating decision.

Rooftop solar sales to ease: Fitch expects HFL's rooftop solar panel sales in Sri Lanka to decline modestly over the next few years. However, we expect growth in HFL's other businesses, such as services and solutions for the construction sector, to mitigate the impact on cash flow, supported by recovering consumption and construction activity. Overall, we expect EBITDA from HFL's existing businesses to remain steady in FY26-FY29, before considering the contribution from planned power generation projects.