| Metric | Current Period | Prior Year Same Period | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥11467.7B | ¥10598.0B | +8.2% |
| Operating Income / Operating Profit | ¥795.5B | ¥598.4B | +32.9% |
| Pre-tax Income | ¥902.2B | ¥591.7B | +52.5% |
| Net Income | ¥681.6B | ¥429.4B | +58.7% |
| ROE | 11.1% | 7.3% | - |
For the fiscal year ended March 2026, Revenue was ¥11,467.7B (YoY +¥869.7B +8.2%), Operating Income was ¥795.5B (YoY +¥197.1B +32.9%), Ordinary Income was ¥868.2B (YoY +¥296.1B +50.1%), and Net Income attributable to parent company shareholders was ¥620.1B (YoY +¥257.8B +70.7%), achieving substantial top- and bottom-line growth. Revenue expanded across major regions — Americas, Japan, Asia, and India. Operating income benefited from an improvement in gross margin (16.2%, YoY +1.1pt) and the realization of operating leverage, raising the operating margin to 6.9% (YoY +1.3pt). Ordinary Income showed a significant improvement in financial results due to increased financial income (¥113.2B, YoY +¥53.4B), and Net Income per share (EPS) expanded to ¥494.11 (YoY +¥208.11 +72.8%).
[Revenue] Revenue reached ¥11,467.7B (YoY +8.2%). By region: Japan ¥4,478.7B (+11.2%) achieved double-digit growth supported by domestic demand recovery and yen depreciation; Americas ¥4,250.4B (+6.1%) was solid thanks to increased deliveries to key customers; Asia ¥1,029.1B (+12.8%) and India ¥514.9B (+22.4%) maintained high growth driven by expanded local production. China ¥862.0B (-6.4%) saw a revenue decline due to a challenging market environment, although the loss magnitude is trending smaller. Europe & Africa ¥332.7B (+6.4%) continued steady growth. Revenue composition by region was Japan 39.0%, Americas 37.1%, Asia & India 14.2%, China 7.5%, Europe & Africa 2.9%.
[Profitability] Cost of sales ratio improved to 83.8% (from 84.9% a year earlier, improvement of -1.1pt), raising gross margin to 16.2%. The main drivers of cost improvement were production efficiency gains, higher utilization, improved product mix (higher proportion of high-margin regions), and favorable FX. Selling, general and administrative expenses were ¥1,032.8B (YoY +¥141.0B), but as a percentage of revenue rose only modestly to 9.0% (from 8.7% a year earlier, +0.3pt), resulting in Operating Income of ¥795.5B (+32.9%) and an Operating Margin of 6.9% (+1.3pt). Financial income of ¥113.2B far exceeded financial expenses of ¥33.2B, and together with equity-method investment income of ¥26.7B, non-operating income/expense improved by ¥72.1B YoY, bringing Ordinary Income to ¥868.2B (+50.1%). After corporate taxes and others of ¥220.6B (effective tax rate 24.5%), Net Income attributable to parent company shareholders was ¥620.1B (+70.7%), resulting in overall revenue and profit growth.
Americas: Revenue ¥4,250.4B (+6.1%), Operating Income ¥349.9B (+2.5%), Margin 8.2%. Revenue was solid due to increased deliveries to major customers, but profit only edged up modestly due to rising costs.
Japan: Revenue ¥4,478.7B (+11.2%), Operating Income ¥235.3B (+105.9%), Margin 5.3%. Domestic demand recovery, yen depreciation, and fixed-cost reduction measures led to a doubling of operating income and a marked improvement in profitability.
Asia: Revenue ¥1,029.1B (+12.8%), Operating Income ¥149.2B (+5.3%), Margin 14.5%. Continued high growth from expanded local production, maintaining the highest margin among segments.
India: Revenue ¥514.9B (+22.4%), Operating Income ¥57.7B (+32.3%), Margin 11.2%. Strong local market demand drove high growth in revenue and profit with healthy profitability.
China: Revenue ¥862.0B (-6.4%), Operating Income -¥20.9B (loss narrowed YoY -71.1%), Margin -2.4%. Revenue declined and losses persisted due to a challenging market environment, but cost reduction initiatives substantially narrowed the deficit.
EuropeAndAfrica: Revenue ¥332.7B (+6.4%), Operating Income ¥26.6B (-1.0%), Margin 8.0%. Revenue grew steadily, but profit recorded a slight decline.
[Profitability] Operating margin improved to 6.9% (from 5.6% a year earlier, +1.3pt), Net margin to 5.9% (from 4.1% a year earlier, +1.9pt), and ROE to 11.2% (from 6.8% a year earlier, +4.4pt), indicating an overall enhancement in profitability. The rise in ROE was driven primarily by a significant improvement in Net margin (+1.9pt) and a modest improvement in total asset turnover (1.155x, from 1.09x a year earlier, +0.06x), while financial leverage edged up slightly to 1.61x (from 1.55x). [Cash Quality] The Operating Cash Flow / Net Income ratio was 1.93x (Operating Cash Flow ¥1,316.9B ÷ Net Income ¥681.6B), indicating strong cash generation. Operating CF subtotal (pre-working capital changes) was ¥1,459.7B, reaching 1.62x of Pre-tax Income ¥902.2B. Working capital was broadly neutral with inventory increase of +¥22.1B, accounts receivable slight decrease of -¥2.5B, and accounts payable slight increase of +¥0.2B. After corporate tax payments of -¥168.2B, Operating CF significantly exceeded Net Income. [Investment Efficiency] Capital expenditure of ¥574.5B exceeded depreciation of ¥536.6B, increasing tangible fixed assets by ¥416.4B YoY. Capex/Revenue ratio was 5.0%. Free Cash Flow (Operating CF - Capex) was ¥820.5B, maintaining strong cash generation post-investment. [Financial Soundness] Equity Ratio was 57.3% (down -2.1pt from 59.4% a year earlier). Interest-bearing debt was ¥1,233.4B (current ¥468.1B, non-current ¥765.3B), with a Debt/Equity ratio of 0.20x, remaining low. Current ratio was 195.7% (Current Assets ¥4,869.3B ÷ Current Liabilities ¥2,487.3B). Cash and deposits totaled ¥1,318.1B, providing ample short-term liquidity. Interest coverage (Operating CF ÷ Interest Paid) was 39.5x, indicating very strong ability to service interest.
Operating Cash Flow was ¥1,316.9B (YoY +43.1%), a significant increase and demonstrating strong cash conversion relative to Pre-tax Income ¥902.2B. From Operating CF subtotal ¥1,459.7B, the company generated Operating CF after corporate tax payments of -¥168.2B, net interest/dividend income of +¥13.9B, and working capital changes of +¥11.4B (inventory +¥22.1B, accounts receivable -¥2.5B, accounts payable +¥0.2B). Investing CF was -¥496.5B, mainly driven by Capex -¥574.5B, partly offset by proceeds from sales of tangible fixed assets +¥28.4B and net increase/decrease in time deposits +¥76.7B. FCF was ¥820.5B, which exceeded the sum of dividend payments ¥133.5B and Capex of ¥707.9B, enabling ¥453.6B of share buybacks from surplus funds. Financing CF was -¥708.9B, reflecting share buybacks -¥453.6B, dividend payments -¥133.5B, dividends to non-controlling interests -¥82.3B, and long-term borrowings repayments -¥206.1B, partially offset by bond issuance +¥99.6B and long-term borrowings +¥80.4B. Cash and deposits increased from ¥1,187.7B at the beginning of the period to ¥1,318.1B at the end, after Operating CF +¥1,316.9B, Investing CF -¥496.5B, Financing CF -¥708.9B, and foreign exchange effects +¥18.9B, strengthening the cash position.
Earnings quality is good. Operating CF of ¥1,316.9B is 1.66x Operating Income ¥795.5B, indicating most profits are cash-backed. Other income of ¥88.8B includes a gain on negative goodwill of ¥52.5B (a one-time gain from acquisition of subsidiary shares), which is a non-recurring non-operating factor and does not affect recurring earnings. Financial income of ¥113.2B substantially exceeded financial expenses of ¥33.2B, contributing +¥80.0B to financial results. Equity-method investment income of ¥26.7B is a recurring earnings source. Comprehensive income of ¥933.5B exceeded Net Income ¥681.6B by +¥251.9B, primarily due to foreign currency translation adjustments of +¥240.0B from overseas operations. The accruals (Operating CF subtotal ¥1,459.7B minus Net Income ¥681.6B) were +¥778.1B, mainly driven by non-cash expenses such as depreciation ¥536.6B and impairment losses ¥53.9B; working capital changes were limited at +¥11.4B, supporting high cash backing of profits.
The FY2027 (year ending March 2027) full-year forecast projects Revenue ¥12,000.0B (vs. current period +4.6%), Operating Income ¥800.0B (vs. current period +0.6%), Net Income attributable to parent company shareholders ¥570.0B (vs. current period -8.1%), and EPS ¥97.30 (post 5-for-1 stock split). The Operating Income progress rate versus current results is 99.4% (¥795.5B ÷ ¥800.0B), indicating the company has nearly achieved the full-year target and leaving limited upside, which suggests a conservative guidance. The planned decline in Net Income appears to incorporate the expected fall-off of one-off factors this period such as increased financial income and negative goodwill. The dividend forecast is an annual ¥85 (post-split; equivalent to ¥425 pre-split), implying a Payout Ratio of 87.4% (based on pre-split FY forecast EPS ¥97.30 × 5 = ¥486.5 and dividend ¥425), a high level but a cut from the current period dividend of ¥138 (pre-split). The forecasts likely reflect cautious assumptions around FX and cost environment uncertainty and the pace of China business profitability.
The current period dividend was interim ¥50 and year-end ¥88, totaling ¥138 annually. Total dividends amounted to ¥21.59B against Net Income attributable to parent company shareholders ¥620.1B, implying a Payout Ratio of approximately 34.8% (note actual dividend payments of ¥13.35B include prior-period payments). The company executed ¥45.36B in share buybacks, bringing total returns (dividends + buybacks) to approximately ¥58.70B and a Total Return Ratio of about 94.7%. Total returns as a percentage of FCF ¥820.5B was 71.5%, indicating shareholder returns were within cash generation capacity. A 5-for-1 stock split is planned for FY2027, with a post-split year-end dividend forecast of ¥85 (equivalent to ¥90 pre-split) and an annual dividend forecast of ¥175 (pre-split equivalent), representing a planned increase compared to the current period ¥138. Although the forecast Payout Ratio is high at 87.4% on a full-year basis, the strength of Operating CF and cash and deposits of ¥1,318.1B suggest sustainability. The combination of buybacks and dividends demonstrates a strong commitment to shareholder value.
Accounts receivable collection extension risk: Trade receivables of ¥1,994.5B increased ¥230.7B YoY, and Days Sales Outstanding (DSO) relative to Revenue ¥11,467.7B is approximately 63 days, exceeding 60 days. Extended collection terms during a revenue growth phase may increase working capital burden and potential credit costs, necessitating strict credit control and strengthened collection processes.
Structural deficit risk in China operations: The China segment continues to record an operating loss of ¥20.9B and revenue declined -6.4% YoY. Although the deficit narrowed YoY by -71.1%, continued market uncertainty and intensified competition could delay structural reforms and introduce volatility to consolidated earnings. Ongoing monitoring of fixed-cost reductions and business restructuring is important.
Short-term liquidity management risk: Current liabilities rose significantly to ¥2,487.3B (YoY +34.0%), with short-term bonds and borrowings within that totaling ¥468.1B (YoY +145.5%) and sharply increasing. Although cash and deposits of ¥1,318.1B and a current ratio of 195.7% secure short-term liquidity, increased short-term financing implies higher refinancing costs and funding pressure in a rising-rate environment, requiring maturity management and diversification of funding sources.
Profitability & Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| ROE | 11.2% | 6.3% (3.2%–9.9%) | +4.9pt |
| Operating Margin | 6.9% | 7.8% (4.6%–12.3%) | -0.8pt |
| Net Margin | 5.9% | 5.2% (2.3%–8.2%) | +0.8pt |
ROE is +4.9pt above the industry median and ranks high, while Operating Margin is -0.8pt below the median. Net Margin exceeds the median, with improved financial results lifting final profitability.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | 8.2% | 3.7% (-0.4%–9.3%) | +4.5pt |
Revenue growth rate is +4.5pt above the industry median, indicating an upper-tier growth pace.
※ Source: Company aggregation
Trend toward structural improvement in Operating Margin: Operating Margin improved to 6.9% (from 5.6% a year earlier, +1.3pt), supported by gross margin improvement (16.2%, +1.1pt) and realization of operating leverage. Japan’s doubling of Operating Income (+105.9%) and stable growth in Americas, Asia, and India suggest structural improvement in profitability. Continued narrowing of China losses (-71.1% YoY) could provide further upside to consolidated margins.
High total returns and robust cash generation: In addition to a dividend payout ratio of approximately 34.8%, the company executed share buybacks of ¥45.36B, bringing the Total Return Ratio to approximately 94.7%. FCF of ¥820.5B exceeds total returns, and Operating CF/Net Income ratio of 1.93x provides strong cash backing. The planned 5-for-1 stock split in FY2027 and the high Payout Ratio plan (87.4%) indicate commitment to shareholder returns and potential re-rating through improved liquidity.
Optimization of regional mix and diversification of growth drivers: High-margin regions — Americas (Operating Margin 8.2%), Asia (14.5%), and India (11.2%) — are driving earnings, while Japan’s fixed-cost improvements (Margin 5.3%, doubling from 2.6% a year earlier) bolster consolidated results. Reduced China exposure (revenue composition 7.5%) and diversification toward growth regions enhance portfolio resilience.
This report is an AI-generated financial analysis document produced from XBRL earnings disclosure data. It is not a recommendation to invest in any specific security. Industry benchmarks are reference information compiled by the company from public financial statement data. Investment decisions are your responsibility; consult a professional advisor as needed.