*First Capital Research | Initiation Coverage | 27 Jan 2025* *JAT HOLDINGS PLC | INITIATING WITH A BUY* _FY26E: LKR 40.0 [+48.1%]_ _*“FLOURISHING THROUGH FOCUS STRATEGIES...”*_ ▫️FCR initiates the investment coverage on JAT, with a BUY recommendation for FY26E target price of LKR 40.0 with a total annualised return of 44.6% (DY 6.0%) for the last close of LKR 27.0 as at 27th Jan-25. ▪️We believe that JAT's strong growth potential, margin expansion prospects, market leadership in Sri Lanka and the rising opportunities and growing presence in the key operating markets may provide lucrative investor returns. ▫️By FY26E, JAT anticipates fully realizing the cost benefits from the binder plant, resulting in a 5.4% reduction in raw material cost per unit, which may save LKR 430.2Mn. Additionally, FCR expects a 4.6% increase in capacity utilization at the Kahathuduwa plant by FY26E. These improvements are projected to drive a 32.7%YoY growth in the bottom line, contributing to a 244bps YoY expansion in net profit margin and a 281bps YoY growth in ROE, potentially triggering a rise in the share price towards our target price. *Full Report:-* _https://firstcapital.lk/wp-content/uploads/2025/02/JAT-Initiation-Coverage-27-01-25-1.pdf_ *-First Capital Research-*