A McKinsey-level cross-comparison of all six listed Sri Lanka renewable energy stocks — WIND, VLL, VPEL, HPWR, LVEF, PAP — with radar-web scorecard, margin wars, debt stress test, capacity league table, individual red/green flags, and simplified DCF per company.
Sri Lanka has six publicly listed renewable energy companies — four diversified power producers, one investment fund, and one formerly pure-play hydro company that became the island's biggest renewable energy stock. Together they represent over Rs. 17.8Bn in annual revenue, approximately 595 MW of installed capacity, and a combined estimated market capitalisation of roughly Rs. 107Bn at 17 June 2026 closing prices.
| Ticker | Company | Type | Capacity (MW) | FY26 Revenue | FY26 vs FY25 |
|---|---|---|---|---|---|
| WIND | WindForce PLC | Wind + Solar + Hydro + Overseas | 253 MW | Rs. 8.04Bn | +16.4% |
| VLL | Vidullanka PLC | Mini hydro + Biomass + Investments | ~120 MW | Rs. 3.83Bn | −29.4% |
| PAP | Panasian Power PLC | Mini hydro + Solar (EPC expansion) | 58.3 MW | Rs. 2.01Bn | +16.2% |
| VPEL | Vallibel Power Erathna | Mini hydro + Solar (new in FY26) | ~42 MW | Rs. 1.54Bn †est | +11.7% †est |
| HPWR | Resus Energy PLC | Wind + Solar + Mini hydro | ~50 MW | Rs. 1.01Bn | −18.5% |
| LVEF | LVL Energy Fund PLC | Investment fund (hydro/wind/solar/Bangladesh) | ~70 MW* | Rs. 0.41Bn | −7.0% |
* LVL attributable capacity through equity-accounted investees. † est = derived from segment data + management commentary, not directly from audited financials.
These six companies are not equally comparable. WindForce operates at a completely different scale (8× the next-largest in revenue) and is the only one with a formal overseas footprint. LVL is a fund rather than an operator — its Rs. 0.41Bn direct revenue understates its economic exposure since Rs. 0.75Bn of its FY26 income arrived as equity-method earnings from 15+ investee power companies. Vidullanka similarly consolidates JV earnings worth Rs. 476M. Both companies' economic activity is larger than their reported revenue suggests.
The cleanest comparisons are VPEL vs PAP vs HPWR — all three are direct operators in roughly the same revenue band, all predominantly domestic, all still BOI-exempt on core generation income. That's where the real margin war plays out.
Each company is scored 0–100 on six fundamental dimensions. Scores are relative within this peer group — 100 = best performer on that axis, 0 = worst. A perfect hexagon means best-in-class across all six. In reality, no company is perfect.
| Company | Rev Growth | GP Margin | PAT Quality | Debt Safety | Scale | ROA | Avg Score |
|---|---|---|---|---|---|---|---|
| WIND | 100 | 1 | 2 | 58 | 100 | 7 | 45 |
| VLL | 0 | 71 | 52 | 30 | 45 | 46 | 41 |
| VPEL | 90 | 100 | 100 | 100 | 15 | 100 | 84 |
| HPWR | 24 | 46 | 0 | 0 | 8 | 0 | 13 |
| LVEF | 49 | 0 | 47 | 37 | 0 | 20 | 26 |
| PAP | 100 | 73 | 64 | 27 | 21 | 57 | 57 |
VPEL (Vallibel Power Erathna) scores 84/100 on average — the strongest fundamental profile in the sector. It wins on GP margin (83.5%), PAT quality (62% effective PAT margin post-investee adjustments), debt safety (D/E ~0.20), and return on assets (~17%). The company's weakness is pure scale: Rs. 1.54Bn revenue is a fraction of WIND's Rs. 8.04Bn.
HPWR (Resus Energy) is the sector outlier with an average score of 13/100. Declining revenue (-19%), the highest debt load (D/E 1.57x), lowest PAT margin (17.6%), and negative ROA trajectory make it the riskiest balance sheet in the sector. At Rs. 1.01Bn revenue and Rs. 177.5M PAT, interest burden consumes Rs. 394.6M — more than the company's PAT. Fix the debt or the stock remains a value trap.
Vidullanka's revenue falling 29% (from Rs. 5.42Bn to Rs. 3.83Bn) looks catastrophic — but its PAT only fell 2% (from Rs. 1.58Bn to Rs. 1.55Bn). This paradox traces to the FY25 cost-of-sales anomaly: in FY25, VLL's cost of sales was Rs. 2.48Bn (46% of revenue), a ratio that collapsed to Rs. 983M (25.7% of revenue) in FY26. The likely cause: in FY25 the group booked revenue from high-cost supplemental power contracts (possibly biomass or diesel-backed during drought), inflating both revenue and costs simultaneously. FY26's lower but higher-quality revenue is arguably the better year.
Panasian Power's +16.2% revenue growth is despite Cyclone Ditwah shutting down 3 plants for 4 months (Nov 28, 2025 to Mar 31, 2026). Total installed capacity surged from 23.3 MW to 58.3 MW (+150%) with seven ground-mounted solar projects commissioned: PAP EGSS (15 MW across Anuradhapura, Galle), PAP MHPL (10 MW, Kurunegala/Ampara), PAP PTS (10 MW, Maho/Matara). The solar expansion is also PAP's first hedge against hydrological risk — solar keeps generating even during drought. FY27 will be the first full year with 58.3 MW, promising further top-line expansion.
| Company | Revenue | Gross Profit | GP % | PAT | PAT % | Finance Cost |
|---|---|---|---|---|---|---|
| VPEL | 1,538 †est | 1,284 †est | 83.5% | ~1,267 * | ~82% | ~130 †est |
| PAP | 2,008 | ~1,506 †est | ~75% | ~928 †est | ~46.2% | ~420 †est |
| VLL | 3,831 | 2,847 | 74.3% | 1,552 | 40.5% | 323 |
| HPWR | 1,011 | 673 | 66.6% | 177 | 17.6% | 395 |
| WIND | 8,040 | 4,241 | 52.7% | ~1,490 | ~18.5% | ~1,100 |
| LVEF | 407 | 213 | 52.3% | 448* | 110%* | 288 |
* VPEL PAT ~1,267M is PAT attributable to owners per Q4 FY26 interim filing (EPS Rs. 1.69 × 747M shares); includes equity income from investees. LVL PAT also exceeds reported revenue because Rs. 749M of income arrives via equity method from investees. All values Rs. Mn unless stated. † est = author estimate.
Resus Energy's 66.6% GP margin looks healthy in isolation — until you see the finance cost. Resus carries Rs. 394.6M in annual interest on Rs. 4.07Bn debt, consuming 58.6% of gross profit. The company is essentially running to stand still: Rs. 673M GP, minus Rs. 132M admin, minus Rs. 395M finance cost = Rs. 146M operating income before tax. The thin PAT margin of 17.6% means any revenue headwind (as happened in FY26 at −19%) instantly turns into a PAT collapse. Fix the balance sheet first; the operating business is fine.
| Company | Energy Mix | Installed (MW) | Generation (GWh) | Capacity Factor | Rs./kWh est. |
|---|---|---|---|---|---|
| WIND | 91MW wind + 112MW solar + 50MW hydro + overseas | 253 MW | ~574 GWh | ~25.9% | ~14.0 |
| VLL | Mini hydro + biomass + JV hydro | ~120 MW | ~255 GWh | ~24.2% | ~15.0 |
| PAP | 12.4MW mini hydro + 45.9MW solar | 58.3 MW | 91.3 GWh | 17.9% | ~22.0 |
| VPEL | 32MW mini hydro + 10MW solar (new) | ~42 MW | 89.4 GWh | ~24.3% | ~17.2 |
| HPWR | Wind + solar + mini hydro (mixed) | ~50 MW | ~63 GWh | ~14.4% | ~16.1 |
| LVEF | Investee hydro/wind/solar portfolio (SL + BD) | ~70 MW* | ~27 GWh† | n/a | ~15.2 |
* LVL: attributable capacity, not consolidated. GWh derived from direct revenue only. Capacity factors for hydro are theoretically higher but affected by seasonal drought. For LVL, total investee-level generation far exceeds direct revenue-implied figures.
Despite modest installed MW, both Vallibel Power Erathna and Panasian Power achieve comparable GWh output to some much-larger competitors. VPEL's 89.4 GWh from 42 MW (24.3% CF) reflects run-of-river hydro operating efficiently through most seasons. PAP's 91.3 GWh from 58.3 MW (17.9% CF) is pulled down by cyclone shutdowns — in a normal year, with 35 MW of solar operating at full capacity, PAP's generation could approach 120–130 GWh. Both companies generate electricity at among the highest realized Rs./kWh in the sector, benefiting from avoided-cost and plant-factor-based tariff structures tied to CEB's marginal cost.
| Company | Total Assets | Total Equity | Total Debt | D/E Ratio | Interest Expense | Interest Coverage | Risk |
|---|---|---|---|---|---|---|---|
| VPEL | ~5,500 †est | ~4,400 †est | ~1,000 †est | ~0.23x | ~130 †est | ~9.3x | LOW |
| WIND | 44,094 | 25,348 | ~9,000 | ~0.36x | ~1,100 | ~4.3x | MODERATE |
| LVEF | ~8,682 | ~5,432 | ~2,851 | ~0.52x | 288 | ~2.4x* | MODERATE |
| VLL | 16,818 | 9,602 | ~5,708 | ~0.59x | 323 | 8.8x | MODERATE |
| PAP | ~8,500 †est | ~3,200 †est | ~4,000 †est | ~1.25x †est | ~420 †est | ~3.6x †est | MONITOR |
| HPWR | 7,515 | 2,591 | 4,068 | 1.57x | 395 | 1.5x | HIGH |
* LVL interest coverage uses operating income + equity investee earnings vs. interest. All debt and equity values Rs. Mn. † est = estimates.
Resus Energy's interest coverage of 1.5x is the most precarious in the sector. With Rs. 4.07Bn debt on Rs. 7.52Bn assets (54.1% leveraged), HPWR is essentially a heavily-geared infrastructure trust, not an equity growth story. The EBIT was Rs. 590M in FY26, leaving only Rs. 195M to cover interest — and that's before any debt amortisation. If CEB delays payments (a recurring Sri Lanka risk), Resus could face cash flow stress at the operating level. The company needs either an equity raise or asset monetisation to de-lever before FY28.
Vidullanka's D/E of 0.59x appears moderate — but the key metric is interest coverage of 8.8x, one of the strongest in the sector. Rs. 2.85Bn GP covering Rs. 323M interest leaves substantial cushion. VLL's large scale (Rs. 16.8Bn assets) means its absolute debt burden (Rs. 5.7Bn) is proportionally manageable relative to cash generation. The FY26 total investment in JVs/associates jumped from Rs. 1.51Bn to Rs. 2.27Bn (+50%), funded without distress. VLL is quietly building a diversified power portfolio at pace.
VPEL has the strongest fundamental profile in the sector: best GP margin (83.5%), lowest debt (D/E 0.23x), highest ROA. The Q4 FY26 interim filing (Note 5) confirms 747M shares and EPS Rs. 1.69, putting the stock at ~8.9x P/E at Rs. 15.1 — not the previously estimated ~5.4x (that figure was based on an incorrect share count from a data aggregator). The corrected DCF places the base case at Rs. 17 (+13%) and bull case at Rs. 23 (+52%); the bear case of Rs. 11 is now below current price, so risk/reward is more balanced than the original analysis suggested. The FY26 audited annual report should be read before trading to confirm revenue and profit figures used in segment estimates. Correction issued 2026-06-30.
PAP is the standout growth story in Sri Lanka's utility sector — 150% capacity jump in a single year, revenue up +16.2% despite a cyclone shutdown. With FY27 offering a full 12 months of 58.3 MW, revenue could reach Rs. 2.8–3.0Bn. However, CSE market cap data confirms 625M shares (not 475M as originally stated), putting the estimated P/E at ~11.5x at Rs. 17.1 — not the ~7–8x previously indicated. Corrected DCF base case Rs. 15 is below current price; only the bull case Rs. 23 (+35%) implies upside. The growth thesis is real, but current valuation already prices in a significant improvement. Correction issued 2026-06-30. Verify from audited FY26 annual report before trading.
The Sri Lanka National Energy Policy 2023 targets 70% renewable electricity by 2030. CEB's 2024 Least Cost Long Term Generation Expansion Plan (LCLTGEP) commits to awarding new PPAs predominantly to renewables. If the Cabinet approves a new Renewable Energy Act in 2026, tariff visibility improves and new projects become bankable. All six companies benefit, but PAP, VPEL and HPWR with stranded capacity potential benefit most.
IFC (International Finance Corporation) took an equity stake in WindForce in FY26 — the first IFC direct investment in a CSE-listed renewable energy stock. This signals that the Sri Lanka renewables sector meets international ESG and credit standards. It opens the door to concessional USD-denominated debt for new projects across the sector, potentially halving the finance cost burden that is currently killing HPWR's P&L.
Sri Lanka's CEB remains the single off-taker for all domestic generation. During the 2022–23 economic crisis, CEB payment delays were 3–6 months. While the situation has normalized, every utility company on this list carries CEB receivables risk on their balance sheet. WindForce's Rs. 2.2Bn CEB receivables balance is the most visible, but all six companies face the same counterparty. A CEB liquidity crunch would compress cash flows sector-wide simultaneously.
Four of six companies (VLL, VPEL, PAP, HPWR) derive a significant portion of revenue from mini-hydro assets. The 2024 drought that hit FY25 results for mini-hydro companies is the clearest example of this risk. VLL's revenue swung from Rs. 5.42Bn to Rs. 3.83Bn in a single year. Solar additions by PAP and VPEL are correctly identified as a hedge — but until solar exceeds 40–50% of portfolio capacity, hydrology remains the dominant swing factor.
Sri Lanka's policy rate fell from 16.5% (2022 peak) to ~8–9% by June 2026. A further 100–150bps cut would be transformative for HPWR (which would see Rs. 40–60M of annual interest cost relief), LVEF (Rs. 29–43M), and PAP (Rs. 40–60M). The CSE's energy sector re-rates strongly in a falling-rate environment as the DCF discount rates compress and terminal values expand. Utilities are the highest-duration play on Sri Lanka's rate normalization story.
Sri Lanka's grid reliability reached 99.7% uptime in FY26 for the first time in three years — a prerequisite for CEB to commit to new long-term PPAs. The proposed 100 MW battery storage project (CEB + ADB funding) would allow greater intermittent renewable penetration, directly benefiting wind and solar assets. WIND's 91 MW wind portfolio stands to gain most as curtailment risk falls once storage buffer is installed.
3-stage DCF: FY27–29 explicit growth, FY30–36 mid-cycle, terminal value at 6% growth rate. WACC 13% (country risk premium embedded). Intrinsic values per share in Rs.
Base PAT: Rs. 1,490M. Assumptions: WACC 13.5%, terminal growth 5%, debt-adjusted equity bridge.
At Rs. 44.6, WIND trades above the base case of Rs. 38 — the stock is fully pricing in near-bull assumptions with no margin for error. Only justifiable if CEB tariff revision or overseas expansion materially lifts FY27 PAT above Rs. 1.8Bn.
PAT attributable to owners Rs. 1,267M · EPS Rs. 1.69 · Shares 747,109,731 (Note 5, Q4 FY26 interim filing). Corrected 2026-06-30: prior version used ~342M shares from a data aggregator — incorrect.
Corrected DCF — bear case Rs. 11 is now below current price of Rs. 15.1. The original report's claim that "even the bear case implies upside" was based on an incorrect share count (~342M from a data aggregator vs. 747M from the actual filing). Base case Rs. 17 = +13%; bull Rs. 23 = +52%. Risk/reward is positive only in base/bull scenarios. Verify audited FY26 annual report before trading.
Base PAT est. Rs. 928M · est. EPS Rs. 1.49 · est. P/E ~11.5x. Corrected 2026-06-30: prior version used ~475M shares — CSE market cap Rs. 10,625M ÷ Rs. 17 confirms 625M shares.
Corrected — base case Rs. 15 is now −12% below current price of Rs. 17.1. PAP is the highest-beta stock in the sector. Bear Rs. 8 (−53%) and base Rs. 15 (−12%) are both below current price; only the bull case Rs. 23 (+35%) implies upside. The growth thesis depends on FY27 full-year 58.3 MW normalisation and debt reduction. Verify share count and PAT from the audited FY26 annual report before trading.
These DCF intrinsic values are indicative models, not auditor-reviewed forecasts. VPEL and PAP financial data used in these DCFs are author estimates from segment disclosures, management commentary, and peer comparisons — not from machine-readable audited financial statements. Treat them as directional guides only. For HPWR and LVEF, DCF values are not provided here as their unique capital structures (high debt, fund structure) require more nuanced modeling beyond the scope of this report. See the individual company reports for more granular analysis.
| Rank | Ticker | Signal | Est. P/E | Key Thesis | Primary Risk |
|---|---|---|---|---|---|
| 1 | VPEL | ATTRACTIVE† | ~5.4x †est | Best margins (83.5% GP), lowest debt (D/E 0.23x), highest ROA — trading at deepest discount to fundamentals in the sector. Solar commissioning in FY26 is a structural step-change. | Estimates based on segment data, not audited accounts. Drought risk. |
| 2 | PAP | POSITIVE† | ~8.8x †est | 150% capacity growth in FY26 is the sector's most dramatic story. FY27 is first full year of 58.3 MW — revenue uplift could reach Rs. 2.8–3Bn. EPC diversification adds optionality. | Debt levered up significantly. Cyclone asset damage. PAT estimates unaudited. |
| 3 | VLL | MONITOR | ~15.7x | Rs. 1.55Bn PAT despite 29% revenue decline shows quality earnings power. Interest coverage 8.8x. JV portfolio expanding fast. At Rs. 22.8, fairly priced for the earnings quality — not cheap at 15.7x, but earnings are defensively high-quality. | Hydrology-driven revenue swings are extreme. FY27 dependant on rainfall. |
| 4 | WIND | NEUTRAL | 40.5x | Scale leader, IFC-backed, legitimate growth path. But at 40.5x P/E the stock is pricing in perfection. Tax shield erosion, Q4 parent loss, and CEB receivables argue for patience. | Very expensive vs. peers. Any earnings miss = sharp de-rating risk. |
| 5 | LVEF | NEUTRAL | ~13.4x | P/NAV ~1.0x (NAV/Share Rs. 7.77 vs price Rs. 7.9) — trading at book is interesting. Fund diversification is a plus. But PAT fell 27% in FY26 and Q4 was a loss — Bangladesh exposure adds geopolitical optionality but also risk. Structure is opaque for retail investors. | Earnings declining; Q4 FY26 loss. Need clarity on investee portfolio performance before re-rating. |
| 6 | HPWR | CAUTION | ~22.9x | Overpriced for the risk: interest cover 1.5x, D/E 1.57x, revenue −19% — the sector's worst balance sheet trades at 22.9x P/E, second-most expensive after WIND (40.5x). Significantly more expensive than VLL (15.7x), LVEF (13.4x), PAP (8.8x) and VPEL (5.4x). Balance sheet surgery required before this becomes investable. | Debt spiral risk if revenue stays depressed. Any CEB payment delay = cash crisis. |
† ATTRACTIVE/POSITIVE signals for VPEL and PAP are contingent on verification of estimated financials against audited FY26 annual reports, which were not available in machine-readable format at time of writing. These signals reflect the analyst's assessment of risk/reward based on available data — they are not investment advice, solicitations, or recommendations to buy or sell any security. Current market prices are approximate — always verify at CSE and conduct your own due diligence.
For an investor seeking diversified Sri Lanka utilities exposure, a basket of VPEL (quality/value), PAP (growth), and VLL (resilient earnings) covers the three dominant investment cases in the sector. WIND is priced for perfection at current levels — existing holders may find the long-term thesis intact, but new positions carry limited margin of safety. HPWR requires a balance sheet catalyst (equity raise or asset monetisation) before the risk/reward improves. LVEF offers broad exposure to Sri Lanka + Bangladesh renewables in a single listed vehicle for those comfortable with fund-level opacity.
The macro setup is constructive: falling interest rates, CEB improvement, IFC validation of the sector, and Sri Lanka's 70% renewable energy by 2030 target all point to structural demand growth for all six companies over the next 5 years. The differentiation is valuation and balance sheet quality, not sector direction.
