LLUB delivered a robust 32% YoY increase in PATMI in 2Q FY25, underpinned by a 7% growth in revenue and a marginal 0.2% YoY reduction in operating expenses. This drove an expansion in gross and EBIT margins to 36% (from 33%) and 24% (from 20%), respectively, reflecting moderated cost pressures. Looking ahead, retail demand is expected to recover as vehicle import restrictions ease, while industrial volumes will be supported by growth in construction and tourism. Export markets are also anticipated to gradually strengthen over the medium to long term. With limited capital expenditure requirements and a consistent dividend track record, we forecast a payout ratio above 90%, translating into an estimated DPS of LKR 17.00 in 2026E. We reiterate our HOLD recommendation with a target price of LKR 196.60 (2026E), implying a upside of 8.0%.