Nippon Carbon Co Ltd

Nippon Carbon maintains a strong liquidity position, with a current ratio of 2.55 and cash and equivalents amounting to ¥13.04 billion, which provides a buffer against short-term obligations. The company's debt-to-equity ratio of 0.18 indicates a conservative capital structure, with long-term debt of ¥8.81 billion compared to total equity of ¥50.35 billion. This low leverage supports financial stability and flexibility.

Profitability metrics show a return on equity (ROE) of 1.93% and a return on assets (ROA) of 1.21%, both below the industry median for electrical components and equipment. The company's operating margin is 18.64% (¥1.57 billion operating income on ¥8.44 billion revenue), which is in line with the sector average but leaves room for improvement in cost control and pricing power.

Geographically, Nippon Carbon's revenue is concentrated in Japan, with limited exposure to international markets. The company's business is primarily driven by domestic demand in the automotive and electronics industries. Segment-wise, the carbon brushes and battery materials divisions are the primary contributors to revenue, though the input data does not provide a detailed breakdown of segment performance.

Looking ahead, the company is projected to see modest revenue growth, with the outlook for the current fiscal year and the next fiscal year showing a slight increase in revenue. The company's market price of ¥4,735 is trading at a price-to-earnings (P/E) ratio of 53.76, which is significantly higher than the industry median, suggesting potential overvaluation relative to earnings.

Risk factors include exposure to raw material price volatility and demand fluctuations in the automotive and electronics sectors. The company's liquidity risk is low, supported by strong cash reserves, and dilution risk is also low, with no immediate filing-based flags detected. However, the high P/E ratio and relatively low ROE suggest that investors should monitor earnings sustainability and operational efficiency.

Recent events include a stable analyst outlook, with a mean price target of ¥5,000 and a median recommendation of 3.00 (Hold). There are no strong buy or buy ratings, indicating a cautious stance from analysts. The company has not issued any recent significant press releases or earnings transcripts that would suggest a material change in business strategy or performance.

Net income grew at a 15.3% CAGR over four years, reaching 4.8 billion JPY in FY2026.

Free cash flow increased by 37.8% year-over-year to 1.2 billion JPY in FY2026.

Analyst consensus implies 4.6% upside, with a mean price target of 5,000 JPY.

Revenue declined 0.6% year-over-year, indicating stagnation at 37.7 billion JPY in FY2026.

Long-term debt rose to 10.3 billion JPY in FY2026, reversing previous reduction trends.

Gross profit decreased to 10.3 billion JPY in FY2026, down from 11.5 billion JPY prior.

Revenue ¥10.26B, −2,6% YoY; Operating income −61,6% YoY.

• ▍Revenue ¥10.26B, −2,6% YoY
• ▍Operating income −61,6% YoY
• ▍Net income −79,8% YoY
• ▍Net margin 2.3%

Revenue ¥9.17B, +6,4% YoY; Operating income −44,8% YoY.

• ▍Revenue ¥9.17B, +6,4% YoY
• ▍Operating income −44,8% YoY
• ▍Net income +286,0% YoY
• ▍Net margin 25.0%

Revenue ¥10.35B, −0,1% YoY; Operating income −22,3% YoY.

• ▍Revenue ¥10.35B, −0,1% YoY
• ▍Operating income −22,3% YoY
• ▍Net income +22,7% YoY
• ▍Net margin 15.7%

Revenue ¥7.96B, −5,7% YoY; Operating income −21,4% YoY.

• ▍Revenue ¥7.96B, −5,7% YoY
• ▍Operating income −21,4% YoY
• ▍Net income −30,5% YoY
• ▍Net margin 8.5%

Revenue ¥10.53B; Operating income ¥1.52B.

• ▍Revenue ¥10.53B
• ▍Operating income ¥1.52B
• ▍Net margin 11.3%

Revenue ¥8.62B; Operating income ¥1.31B.

• ▍Revenue ¥8.62B
• ▍Operating income ¥1.31B
• ▍Net margin 6.9%

Revenue ¥10.36B; Operating income ¥1.65B.

• ▍Revenue ¥10.36B
• ▍Operating income ¥1.65B
• ▍Net margin 12.8%

Revenue ¥8.44B; Operating income ¥1.57B.

• ▍Revenue ¥8.44B
• ▍Operating income ¥1.57B
• ▍Net margin 11.5%

Revenue ¥37.73B, −0,6% YoY; Operating income −34,9% YoY.

• ▍Revenue ¥37.73B, −0,6% YoY
• ▍Operating income −34,9% YoY
• ▍Net income +18,4% YoY
• ▍Free cash flow +37,8% YoY
• ▍Net margin 12.8%

Revenue ¥37.96B, +0,2% YoY; Operating income −2,0% YoY.

• ▍Revenue ¥37.96B, +0,2% YoY
• ▍Operating income −2,0% YoY
• ▍Net income +0,7% YoY
• ▍Free cash flow −58,9% YoY
• ▍Net margin 10.7%

Revenue ¥37.87B, +5,8% YoY; Operating income +37,7% YoY.

• ▍Revenue ¥37.87B, +5,8% YoY
• ▍Operating income +37,7% YoY
• ▍Net income +26,8% YoY
• ▍Free cash flow +0,8% YoY
• ▍Net margin 10.7%

Revenue ¥35.80B, +13,4% YoY; Operating income +33,8% YoY.

• ▍Revenue ¥35.80B, +13,4% YoY
• ▍Operating income +33,8% YoY
• ▍Net income +17,0% YoY
• ▍Free cash flow +30,5% YoY
• ▍Net margin 8.9%