Kumagai Gumi Co.,Ltd.
1861・Prime Market・Construction
Business
Kumagai Gumi is a general construction company founded in 1898, operating civil engineering (erosion/flood control, roads, railways, etc.), building construction (apartments, offices, factories, etc.), and peripheral businesses through its group of subsidiaries (road paving, materials manufacturing, technical products, etc.). It serves both government and private-sector clients, maintains a nationwide branch network in Japan, and also conducts overseas operations in Taiwan, Vietnam, Indonesia, Hong Kong, and other locations. Through a capital and business alliance with Sumitomo Forestry, the company is also pursuing synergies in the wooden building construction field. Consolidated net sales for FY2026 (ending March 2026) were ¥487,698 million.
Business Model
In the construction business, the company receives orders for public and private sector projects and recognizes revenue as completed construction revenue, based on a fundamental contracting model. It aims to improve profit margins through selective order-taking with an emphasis on profitability and the use of price escalation clauses. A group of subsidiaries (Gaiaart Corporation, Technos Corporation, Fatec Corporation, etc.) handles construction-related peripheral areas and also sells technical products externally, both within and outside the group. Under the medium-term management plan, the company is accelerating investment in peripheral businesses (on a scale of ¥40 billion) such as real estate development, renewable energy, and PPP/PFI, aiming to transform its revenue structure away from dependence on construction contracting.
Company Strengths
In the construction business, the impact of unprofitable projects from COVID-era orders has fallen away, and projects with improved gross profit margins at the time of order are progressing smoothly. In FY2026 (ending March 2026), construction operating profit is expected to increase by ¥13.3 billion year on year to ¥14,160 million, with the operating profit margin improving significantly to 5.5%. The order backlog carried forward to the next period (non-consolidated) remains at a high level of ¥532,317 million, securing a stable base for sales absorption.
The company has developed numerous proprietary technologies, including the tunnel face automatic modeling system "TufmoS-HMC," autonomous driving ADT (Articulated Dump Truck), fully automated blasting charge loading, and precast slabs for EV wireless power supply. R&D expenditure amounted to ¥3,418 million. The company is promoting the introduction of the new core system "Kensetsu WAO" and the construction of KDP (Kumagaigumi Digital Platform) to improve on-site productivity and pass on technical expertise.
In 2017, the company concluded a capital and business alliance with Sumitomo Forestry, combining Sumitomo Forestry's expertise in timber and greenery with Kumagai Gumi's construction technology. Mid- to large-scale wooden buildings such as "KiGi AKIHABARA," which utilize proprietary technologies including the "environmentally friendly λ-WOOD II® fire-resistant floor," have received high market acclaim and function as a growth field driving orders.
ENVALITH's Perspective
Performance Trend
Completed construction revenue bottomed out at ¥403,502 million in FY2023 (ended March 2023), recovered to a peak of ¥498,581 million in FY2025 (ended March 2025), and then declined slightly to ¥487,698 million in FY2026 (ending March 2026), down 2.2% year on year. On the profit side, however, operating profit reached ¥27,092 million (up 89.5% year on year), the highest level in the past five fiscal years, driven mainly by an improvement in the gross profit margin on completed construction in the construction business (non-consolidated, from 4.0% to 9.8%). External factors—the continued high level of private-sector capital investment, stable execution of public investment, and the legal establishment of price escalation clauses—also supported the improvement in profit margins. Operating cash flow improved substantially to ¥25,016 million (from ¥8,233 million in the previous period), and the balance of cash and cash equivalents at period-end increased to ¥64,679 million.
Growth Strategy
The company aims to achieve its medium-term management plan targets through three pillars: strengthening the construction business, accelerating peripheral businesses, and enhancing its management foundation.
Promoting thorough implementation of the selective order-taking policy in the architectural business and pass-through of price increases to contract amounts through the use of price escalation clauses. In FY2026 (ended March 2026), the non-consolidated architectural business's completed construction gross profit margin improved significantly to 9.8% (from 4.0% in the previous fiscal year), reflecting the effects of these measures in the numbers. The target for FY2027 (ending March 2027) is 12.0%.
Newly consolidated Local Energy System Co., Ltd. and KG Dino Resort Co., Ltd. (in FY2026, ended March 2026), expanding the business domain into the renewable energy and resort fields. Continuing investments in real estate and construction businesses in Taiwan, Vietnam, and the United States. The subsidiary segment recorded net sales to outside customers of ¥116,182 million and operating profit of ¥7,086 million.
The financial targets for fiscal 2026 (FY2027, ending March 2027) are consolidated net sales of ¥500 billion, consolidated ordinary profit of ¥30 billion, and ROE of 10% or higher. The forecast for FY2027 (ending March 2027) is completed construction revenue of ¥500,000 million and ordinary profit of ¥31,000 million, with the ordinary profit target expected to be achieved. ROE already exceeded the target level, with actual results of 10.9% in FY2026 (ended March 2026).
Last updated: July 19, 2026