Thakral Corporation: Lifestyle Segment Drives Strong Growth Despite Unrealised Investment Losses September 4, 2026

Brief Overview

Thakral Corporation reported 1H26 revenue growth of 18% year-on-year to S$189.4 million, falling slightly below expectations at 40% of the full-year forecast, primarily due to a S$22.3 million unrealised loss on quoted investments. Adjusted PATMI (excluding quoted investments) rose 47% year-on-year to S$7.6 million, also at 40% of the full-year forecast, weighed down by higher interest expenses from increased borrowings. An interim dividend of 2 cents per share was declared, with the second half of the year being seasonally stronger.

Investment Positives

The lifestyle segment was the standout performer in 1H26. Lifestyle revenue grew 34% year-on-year, comfortably exceeding management’s 25% growth guidance. This was supported by the exclusive distribution of DJI products in South Asia, which rose 28%, and the beauty and fragrance portfolio in Greater China, which surged 44%. Lifestyle EBIT jumped 47% year-on-year to S$10.7 million, with strong momentum expected to continue into 2H26.

Share of profit of associates (excluding GemLife) rose significantly to S$6.1 million from S$1.4 million, driven by higher valuations of the Group’s Osaka office buildings. Revenue from the Nespresso business more than doubled year-on-year and remains on track to achieve profitability in FY27.

The Group also increased its stake in the Gurugram mixed-use, healthcare-led development to 95.28%, gaining strategic control. The project recorded a S$2.4 million valuation gain in 1H26 and offers meaningful NAV upside over the medium to long term, with over 2.5 million square feet of total development potential and an estimated 900-bed hospital capacity.

Investment Negatives

The Group reported a S$22.3 million net unrealised fair value loss in 1H26, primarily due to the decline in GemLife’s share price. The investment division will continue to be affected by movements in the market prices of GemLife and TBTG, although these losses are non-cash in nature. The Group views GemLife as a long-term strategic investment, supported by the business’s strong underlying fundamentals.

Outlook

Demand for fragrance and DJI products remains strong, with continued expansion of the Lifestyle business and improved operating leverage supporting overall performance. Bharat Skytech commenced manufacturing drone components in May 2026 under the “Make in India” programme, and the Group increased its stake in Skylark Drones to 29.2% while establishing a manufacturing joint venture with Skylark. In Japan, the five Osaka office buildings are 97.2% occupied. The Lifestyle segment is expected to outperform management’s 25% growth guidance for FY26.

Recommendation & Target Price

Phillip Securities Research maintains a BUY recommendation with a lower sum-of-the-parts-derived target price of S$2.22, reduced from S$2.56 previously. A 50% conglomerate discount has been applied. The FY26 PATMI forecast (excluding quoted investments) has been lowered by 3% due to higher finance costs from additional borrowings, partly offset by stronger lifestyle segment margins.

Frequently Asked Questions

Q: Why did Thakral's 1H26 revenue fall below expectations?

A: Revenue of S$189.4 million came in at 40% of the full-year forecast, primarily due to a S$22.3 million unrealised loss on quoted investments.

Q: How did the Lifestyle segment perform in 1H26?

A: Lifestyle revenue grew 34% year-on-year, with EBIT jumping 47% to S$10.7 million, driven by strong fragrance sales in Greater China (+44%) and DJI product distribution in South Asia (+28%).

Q: What caused the unrealised fair value losses?

A: The S$22.3 million net unrealised fair value loss was mainly due to the decline in GemLife's share price. These losses are non-cash in nature.

Q: What is the current recommendation and target price?

A: Phillip Securities Research maintains a BUY recommendation with a target price of S$2.22, reduced from S$2.56 previously.

Q: Why was the target price lowered?

A: The target price was reduced due to lower FY26 PATMI forecasts driven by higher finance costs from additional borrowings, updates to quoted investment market values, and the accounting for the additional 81.64% stake acquisition in the Gurugram project.

Q: What is the outlook for the Lifestyle segment?

A: The Lifestyle segment is expected to outperform management's 25% growth guidance for FY26, supported by stronger demand for beauty and lifestyle products.

Q: What is the status of the Nespresso business?

A: Revenue from the Nespresso business more than doubled year-on-year and remains on track to achieve profitability in FY27.

Q: What is the significance of the Gurugram development?

A: Thakral now holds a 95.28% stake with strategic control. The project has over 2.5 million square feet of development potential, an estimated 900-bed hospital capacity, and recorded a S$2.4 million valuation gain in 1H26, offering meaningful NAV upside over the medium to long term.

This article has been auto-generated using PhillipGPT. It is based on a report by a Phillip Securities Research analyst.

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About the author

Darren Chan

Darren has over seven years of experience across both the buy-side and sell-side. During his tenure as a fund manager, he managed multiple funds and mandates, including dividend income, growth, customised, Singapore-focused, and regionally focused strategies. He holds a First-Class Honours degree in Banking and Finance from the University of London.

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