| Metric | This Period | Prior Period | YoY |
|---|---|---|---|
| Revenue | ¥62929.7B | ¥58251.6B | +8.0% |
| Operating Income | ¥6229.1B | ¥6428.5B | -3.1% |
| Profit Before Tax | ¥7307.4B | ¥7302.2B | +0.1% |
| Net Income | ¥5438.9B | ¥5297.2B | +2.7% |
| ROE | 13.1% | 14.4% | - |
For the fiscal year ended March 2026, Revenue was ¥62929.7B (YoY +¥4678.1B +8.0%), Operating Income was ¥6229.1B (YoY -¥199.4B -3.1%), Ordinary Income was ¥2843.9B (YoY +¥454.1B +19.0%), and Net Income was ¥5438.9B (YoY +¥141.7B +2.7%). Revenue growth was driven by maintained pricing in the Automotive Business and double-digit growth in the Motorcycle Business (+14.2%), but Operating Income declined due to increases in cost of goods sold and SG&A. Improvement in non-operating items—higher financial income (¥1296.2B, YoY +¥10.8B) and lower financial expenses (¥292.9B, YoY -¥151.5B)—supported a turnaround to higher Ordinary Income and Net Income. Gross margin declined to 25.5% from 26.9% a year earlier (-1.4pt), and operating margin contracted to 9.9% from 11.0% (-1.1pt), clarifying the profile of revenue growth with operating-level profit decline.
[Revenue] ¥62929.7B (YoY +8.0%) was led by the Automotive Business at ¥57064.2B (+7.6%), the Motorcycle Business at ¥4544.9B (+14.2%), and the Marine Business at ¥1194.6B (+8.9%). The Automotive Business, the core with a 90.7% revenue share, benefited from higher volumes in emerging markets and price maintenance. The Motorcycle Business showed the highest growth at +14.2%, and the Marine Business continued high single-digit growth. Segment revenue mix: Automotive 90.7%, Motorcycle 7.2%, Marine 1.9%, Other 0.2%.
[Profitability] Gross profit was ¥16043.5B (gross margin 25.5%), down 1.4pt YoY. Cost of goods sold was ¥46886.2B (YoY +¥4321.2B), rising faster than Revenue due to higher raw material and logistics costs, pushing up the cost ratio. SG&A was ¥10124.9B (SG&A ratio 16.1%), up 6.9% YoY; although below revenue growth rate, the absolute increase pressured Operating Income. Operating Income was ¥6229.1B (operating margin 9.9%), down 3.1% YoY and 1.1pt from 11.0% a year earlier. Non-operating improvements—Financial Income ¥1296.2B and Financial Expenses ¥292.9B—produced a net financial gain of ¥1003.3B (prior net ¥753.7B), driving a 19.0% increase at the Ordinary Income level. Equity-method investment income was ¥75.0B (down from ¥119.9B), offset by improved financial results. Profit Before Tax was ¥7307.4B (YoY +0.1%), income taxes were ¥1868.6B (effective tax rate 25.6%, down 1.9pt from 27.5%), resulting in Net Income ¥5438.9B (net margin 8.6%). Profit attributable to owners of parent was ¥4392.6B (YoY +5.6%); excluding extraordinary items and non-controlling interests, the final stage showed year-on-year profit improvement. In conclusion, the company experienced revenue growth with operating-level profit decline, but improvements in non-operating items led to higher Ordinary Income and Net Income.
The Automotive Business reported Revenue ¥57064.2B (YoY +7.6%), Operating Income ¥5476.3B (YoY -3.5%), and operating margin 9.6% (down 1.1pt from 10.7%). As the core segment, margin compression reflects inability to fully pass on rising costs. The Motorcycle Business posted Revenue ¥4544.9B (YoY +14.2%), Operating Income ¥447.7B (YoY +9.7%), and margin 9.9% (down 0.4pt from 10.3%), delivering both revenue and operating profit growth with a smaller margin decline than Automotive. The Marine Business had Revenue ¥1194.6B (YoY +8.9%), Operating Income ¥266.1B (YoY -13.0%), and margin 22.3% (down 5.6pt from 27.9%); margin levels remain high but profit decline was significant as cost increases manifested. Other businesses recorded Revenue ¥126.0B (YoY +3.9%), Operating Income ¥39.0B (YoY +2.0%), and margin 30.9%, maintaining high profitability despite small scale. Since Automotive accounts for approximately 88% of consolidated Operating Income, margin improvement in Automotive is key to recovering company-level profitability.
[Profitability] ROE 13.8% (down 0.8pt from 14.6%) remains well above the industry median of 6.3% by 7.5pt, indicating a top-tier level. Operating margin 9.9% (down 1.1pt from 11.0%) exceeds the industry median of 7.8% by 2.1pt. Net margin 8.6% (up 1.5pt from 7.1%) outperforms the industry median of 5.2% by 3.5pt, aided by improved non-operating income. Gross margin 25.5% (down 1.4pt from 26.9%) reflects higher costs. [Cash Quality] Operating Cash Flow / Net Income is 1.32x (prior 1.26x), indicating improvement and better working capital efficiency. OCF/EBITDA is 0.82x, with inventory increase (+¥1212.1B) and accounts payable increase (+¥1161.5B) largely offsetting, leaving cash conversion modestly low. FCF ¥2179.9B covers 57.8% of CapEx ¥3774.0B and is 2.63x dividend payments (¥829.6B), indicating ample capacity. [Investment Efficiency] Total asset turnover 0.95x (prior 0.97x) is essentially flat. Financial leverage 1.60x (prior 1.63x) is low and stable. ROA (net income basis) 8.2% (down 0.6pt from 8.8%) mirrors margin compression. [Financial Soundness] Equity Ratio 51.0% (up 1.4pt from 49.6%), D/E 0.18x (prior 0.20x), Net Cash ¥2247.7B (cash & equivalents ¥973.3B - interest-bearing debt ¥748.6B) reflect strong balance sheet. Current ratio 173.7% (prior 157.8%) and interest coverage (EBIT / Financial Expenses) 7.65x indicate high solvency.
Operating Cash Flow was ¥7175.4B (YoY +¥477.5B +7.1%), 1.32x Net Income ¥5438.9B, indicating high quality. Profit Before Tax ¥7307.4B plus depreciation ¥2777.8B (YoY +¥279.2B) were adjusted for working capital changes: inventory increase -¥852.1B (prior -¥162.1B) offset by accounts payable increase +¥1078.0B (prior -¥45.9B). Other working capital worsened to -¥453.5B (prior -¥145.1B), but dividend receipts ¥116.4B and interest receipts ¥296.7B supplemented cash. Corporate tax payments decreased to ¥1606.7B (prior ¥1752.1B), contributing positively. Investing Cash Flow was -¥4995.4B (prior -¥4756.1B), driven by CapEx ¥3774.0B (YoY +¥428.7B) and acquisition of financial assets ¥18707.9B. These were offset by financial asset disposals/collections of ¥17772.8B, so actual capex outflow determined FCF. FCF ¥2179.9B (prior ¥1941.8B) covers dividend payments ¥829.6B by 2.63x. Financing Cash Flow was -¥1272.9B (prior -¥1859.8B), comprising long-term debt repayments ¥1801.8B, short-term debt repayments ¥103.9B, new borrowings ¥2070.0B (net +¥164.3B), dividend payments ¥1135.8B (parent ¥829.6B + non-controlling ¥306.2B), and lease payments ¥131.7B. Cash and equivalents at period-end rose ¥130.6B to ¥973.3B (prior ¥842.7B).
Operating Income ¥6229.1B versus Net Income ¥5438.9B implies net non-operating and extraordinary items of -¥790.2B. Breakdown: Financial Income ¥1296.2B (including dividend receipts ¥116.4B and investment gains), Financial Expenses ¥292.9B (including interest paid ¥126.9B) for a net financial gain of ¥1003.3B; equity-method income ¥75.0B; other income ¥395.1B and other expenses ¥84.5B for a net +¥310.6B; and income taxes ¥1868.6B (effective tax rate 25.6%) deducted. Financial income includes some investment returns, and dividend receipts and FX gains are relatively recurring. Other income may include one-off items such as gains on sale of fixed assets, but amounts are limited. Comprehensive income was ¥5953.0B (attributable to owners of parent ¥5065.5B), ¥514.1B higher than Net Income ¥5438.9B, with OCI contributions including foreign operations translation differences ¥134.5B and valuation differences on financial assets ¥333.8B. The gap between Net Income and OCI is largely valuation; cash-supported earnings quality is good as shown by Operating CF / Net Income of 1.32x. Accrual (Net Income - Operating CF) was -¥1736.5B, indicating cash generation exceeded working capital increases and limiting the risk of profit recognition being brought forward.
Full Year guidance: Revenue ¥68000.0B (vs. this period +8.0%), Operating Income ¥5700.0B (vs. this period -8.5%), Profit Attributable to Owners of Parent ¥3800.0B (vs. this period -13.5%), EPS ¥196.97 (vs. this period -¥30.72). The operating margin guidance of 8.4% (vs. this period 9.9%, -1.5pt) is conservative, incorporating sustained raw material and logistics costs and foreign exchange assumptions (details not disclosed). Revenue is expected to grow but Operating Income is guided lower, reflecting difficulty absorbing costs. The larger decline in Profit Attributable to Owners of Parent (-13.5%) versus Operating Income (-8.5%) likely assumes normalization of non-operating income (financial income, etc.). Dividend guidance is ¥25.0 (current period ¥46.0, -¥21.0), implying a forecast payout ratio of 12.7% (based on forecast parent profit ¥3800B) and a conservative stance. Current period payout ratio was 19.0%; the lower payout ratio next period suggests prudence against earnings volatility. Progress to date: Revenue 92.5% (this period / guidance), Operating Income 109.3%, Parent Profit 115.6%—already exceeding full-year guidance, indicating potential upside to company forecasts given their conservatism.
Annual dividend ¥46.0 (interim ¥22.0 + year-end ¥24.0; prior year ¥20.0, +¥26.0), payout ratio 19.0% (based on parent profit ¥4392.6B). Total dividends ¥1135.8B (parent ¥829.6B + non-controlling ¥306.2B) are covered by FCF ¥2179.9B, with FCF coverage of 2.63x. Share buybacks were effectively zero (CF -¥0.0B); returns are dividend-centric. Next period dividend guidance ¥25.0 (forecast payout ratio 12.7%) implies a steep reduction of ¥21.0 YoY, based on conservative profit forecast (parent profit ¥3800B). Dividend policy aims for stable payouts and incorporates earnings volatility in the forecast. Given Net Cash ¥2247.7B and shareholders’ equity ¥41531.1B, the company has financial capacity for dividend increases or buybacks, but near-term priority appears to be profit preservation and dividend maintenance.
Dependence on Automotive Business: Automotive accounts for 90.7% of revenue and about 88% of Operating Income; Automotive margin deterioration (9.6%, down 1.1pt from 10.7%) directly pressures consolidated earnings. Demand shifts in key markets (India, etc.), heightened competition, and regulatory tightening could affect margins. Inventory ¥6926.8B (YoY +21.2%) and accounts payable ¥5382.9B (YoY +27.5%) indicate expanding working capital; inventory adjustments and liquidity strain are risks if demand weakens.
Cost and Logistics Inflation Risk: Cost ratio 74.5% (up 1.4pt from 73.1%) reflects raw material and transport cost increases. Delays in passing through prices would further erode operating margin. SG&A ratio 16.1% (down 0.1pt from 16.2%) is stable but faces ongoing pressures from labor and R&D spending. Next period guidance operating margin 8.4% (vs. this period 9.9%, -1.5pt) assumes continued cost pressure and is conservative.
FX & Financial Income Volatility Risk: Financial Income ¥1296.2B (YoY +¥10.8B) materially drove non-operating gains, but is sensitive to interest rate environment and exchange rate movements across major market currencies. Equity-method income ¥75.0B (down from ¥119.9B) depends on partners’ performance. Given operating-level profit decline, reliance on non-operating improvements to drive Ordinary and Net Income makes sustainability of financial income central to earnings stability. The ¥514.1B gap between Comprehensive Income ¥5953.0B and Net Income ¥5438.9B (valuation differences) is subject to market volatility.
Profitability & Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Return on Equity | 13.8% | 6.3% (3.2%–9.9%) | +7.5pt |
| Operating Margin | 9.9% | 7.8% (4.6%–12.3%) | +2.1pt |
| Net Margin | 8.6% | 5.2% (2.3%–8.2%) | +3.5pt |
ROE, Operating Margin, and Net Margin all materially exceed industry medians, placing the company in the upper range within manufacturing.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth (YoY) | 8.0% | 3.7% (-0.4%–9.3%) | +4.3pt |
Revenue growth exceeds the industry median by 4.3pt, driven by expansion in emerging markets.
※ Source: Company compilation
The divergence between operating-level profit decline (Operating Income -3.1%) and Net Income increase (+2.7%) driven by improved financial income. Automotive margin 9.6% (down 1.1pt from 10.7%) is pivotal for consolidated earnings; progress in cost reduction and price maintenance is key to margin recovery. Guidance operating margin 8.4% (vs. this period 9.9%, -1.5pt) is conservative; cost improvements and demand stability could produce upside. Inventory increase of +21.2% poses turnover deterioration risk, but accounts payable increase of +27.5% suggests alignment with production planning—reconciling these is a monitoring point.
Financial soundness is robust (Equity Ratio 51.0%, D/E 0.18x, Net Cash ¥2247.7B), supporting dividend and investment capacity. Current dividend ¥46.0 (payout ratio 19.0%) and next period guidance ¥25.0 (payout ratio 12.7%) are conservative, but FCF coverage 2.63x and net cash position limit downside risk to dividends. In the event of upside, options include dividend increases and buybacks. ROE 13.8% and Operating Margin 9.9% are top-tier in the industry; sustaining high profitability in Motorcycle (margin 9.9%) and Marine (margin 22.3%), together with Automotive margin recovery, will drive consolidated performance.
This report was auto-generated by AI analyzing XBRL financial statement disclosures. It is not a recommendation to invest in any specific security. Industry benchmarks are reference information compiled by the company from public financial statements. Investment decisions are your responsibility; consult a professional advisor as needed.