ENVALITH
日特建設株式会社 logo

NITTOC CONSTRUCTION CO., LTD.

1929・Prime Market・Construction

Official website
日特建設株式会社 logo
NITTOC CONSTRUCTION CO., LTD.1929

Business

Nittoc Construction Co., Ltd. is a specialty construction company founded in 1953, with slope protection works, foundation works, ground improvement works, and repair/reinforcement works as its main business areas. Under the brand message "Our pride lies in the places you cannot see," the company's mission is to contribute to safe and secure national land development. Its major customers are government agencies such as the Ministry of Land, Infrastructure, Transport and Tourism and local governments (approximately 83% of completed construction revenue), with orders primarily received via general contractors. The company has seven consolidated subsidiaries (Midori Kosan, Asoh Foam Crete, Shimane Earth Engineering, Yamaguchi Earth Engineering, Ehime Earth Engineering, Fukui Earth Engineering, and PT. NITTOC CONSTRUCTION INDONESIA), and is listed on the Prime Market of the Tokyo Stock Exchange.

Business Model

As shown by orders received of ¥81,056 million (FY2026, ending March 2026), the company receives orders mainly for public works related to national resilience and disaster prevention/mitigation, generating revenue by constructing slope protection, foundation, ground improvement, and repair works. 93.9% of orders are received through sole-source (negotiated) contracts, with designated orders based on technical capability and track record supporting the stability of earnings. With a cost-of-sales ratio of 81.1% and an SG&A ratio of 12.0%, the company has achieved an operating margin of 6.9% through more sophisticated profitability management.

Company Strengths

In the order intake for FY2026 (ending March 2026), the ratio of negotiated (sole-source) contracts reached 93.9% (up from 90.3% in the prior period). The extremely high proportion of contracts awarded by direct designation rather than through competitive bidding reflects the accumulated technical capabilities and construction track record in slope protection and foundation work, which serve as key differentiators from competitors. Continued participation in large-scale, high-difficulty projects such as the Hokkaido Shinkansen extension and Noto Peninsula earthquake recovery work stands as evidence of this.

The company invested ¥628 million in R&D during the period, developing and commercializing proprietary technologies including the robotic spraying systems "Slope Saver" and "Shot Saver," the drilling machine guidance system "SGZAs," the automated grouting control system "COGMA System," and the AI-based slope inspection tool "Hibi Navi AI." These technologies enable labor-saving construction and consistent quality, internalizing the company's own technical capabilities to address the shortage of skilled construction workers.

In March 2025, the company made Aso Foam Crete Co., Ltd. a wholly owned subsidiary, newly incorporating the cellular concrete construction business into its operations. By leveraging the company's nationwide sales network, orders for repair construction expanded 29.3% year on year to ¥9,632 million. As a result of strengthening the business portfolio through M&A, this directly contributed to the 24.7% increase in revenue (to ¥83,797 million) for FY2026 (ending March 2026).

ENVALITH's Perspective

In FY2026 (ending March 2026), large-scale projects such as recovery works related to the Noto Peninsula earthquake and the Nara Prefecture Reisui district erosion control works progressed concentratedly, resulting in significant profit growth with net sales of ¥83,797 million (up 24.7% year on year) and operating profit of ¥5,827 million (up 58.4% year on year). Meanwhile, the company forecasts a decline in both revenue and profit for FY2027 (ending March 2027), projecting net sales of ¥80,500 million (down 3.9% year on year) and operating profit of ¥5,500 million (down 5.6% year on year), with the reversal from the completion of large-scale projects remaining a risk factor for earnings volatility.

The gross profit margin for FY2026 (ending March 2026) showed only a slight improvement to 18.9% (18.7% in the previous fiscal year), while selling, general and administrative expenses continued to rise to ¥10,024 million (from ¥8,883 million in the previous fiscal year). This fiscal year, the effect of increased revenue and strengthened profitability management pushed up profits, but attention should be paid to the fact that, over the medium term, increases in fixed costs such as personnel expenses and DX investment could become a structural factor pressuring the profit margin.

The Medium-Term Management Plan 2026 targets a 3-year average net sales of ¥81.5 billion or more and operating profit of ¥5.7 billion or more. The FY2026 (ending March 2026) results (net sales of ¥83,797 million and operating profit of ¥5,827 million) exceed the target level, but the company itself recognizes that "single-year results fluctuate significantly depending on the project mix," and forecasts a decline in both revenue and profit for FY2027 (ending March 2027). While the continuation of the national resilience budget and steady disaster prevention demand are tailwinds as part of the external environment, the achievability of the 3-year average target depends on the timing of orders for large-scale projects.

Growth Strategy

Under the Medium-Term Management Plan 2026, the company aims to establish a three-pillar business structure, strengthen on-site capabilities, and achieve a 3-year average net sales of ¥81.5 billion.

Slope protection works are positioned as the first pillar, aiming to secure stable revenue while maintaining top-class market share. Orders received for slope protection works in FY2026 (ending March 2026) remained at a high level of ¥38,971 million (up 3.5% year on year), supported by continued reconstruction works related to the Noto Peninsula earthquake.

Orders were secured for works related to the Hokkaido Shinkansen extension and railways, as well as the Kitakasukabe Station area land readjustment project, driving net sales to ¥26,988 million in FY2026 (ending March 2026), up 7.7% year on year. Machinery and equipment purchases (¥497 million) were also made with the aim of expanding orders for ground improvement works. However, orders received declined to ¥25,970 million (down 4.4% year on year), leaving challenges on the order-taking front.

In addition to the conventional repair and reinforcement field, this area is being reorganized as "Renewal Works," encompassing renewal and refurbishment demand for social infrastructure such as sewerage and slope infrastructure, positioning it as the third pillar. Net sales from repair works in FY2026 (ending March 2026) expanded sharply to ¥12,654 million (up 81.2% year on year). From FY2027 (ending March 2026) onward, this segment is planned to be formally reorganized as "Renewal Works" in line with the business strategy of the Medium-Term Management Plan 2026.

"Strengthening on-site capabilities" is set as the top priority under the Medium-Term Management Plan 2026, promoting automation in construction, DX initiatives (including introduction of SFA), and autonomous human capital development. A Human Capital Development Committee and a support section were newly established to build the organizational foundation. As financial targets for FY2028, ROIC of 10% or more, ROE of 10% or more, PBR of 1.5x or more, and a 3-year average EBITDA of ¥6.0 billion have been set.

Long-Term Vision 2035 sets targets of net sales of ¥150.0 billion, operating profit of ¥12.0 billion, and market capitalization of ¥100.0 billion. M&A is being considered to deepen existing businesses, while the "Near-Future Project," a new business exploration initiative through startup collaboration, was launched in FY2025. A progressive dividend policy (maintaining the current DOE level) has been adopted as the shareholder return policy.

Last updated: July 19, 2026