Fitch affirms DSI Samson Group at ‘AA(lka)’

Fitch Ratings has affirmed Sri Lanka-based footwear and tyre manufacturer and retailer DSI Samson Group (Private) Limited’s (DSG) National Long-Term Rating at ‘AA(lka)’. The outlook is stable.

The affirmation and Stable Outlook reflect Fitch’s view that DSG will be able to maintain an adequate liquidity and financial profile as it navigates a recovering domestic economy, counterbalanced by stiff competition and headwinds from weak export markets.

“We believe its profit margins will further narrow in the next 12-18 months before recovering.”

DSG’s rating reflects the company’s prominent position in domestically manufactured and sold pneumatic tyres and footwear. The rating is constrained by the cyclical demand for its largely homogenous products in a very competitive market.

Fitch expects revenue from footwear – which is over 50% of group revenue – to rise across all categories in the financial year ending March 2025 (FY25), albeit slower than FY24’s 24%. This is partly off a higher base but also because of more measured price increases as sales volume is still below the level before Sri Lanka’s economic crisis in 2022.

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