KANDENKO CO.,LTD.
1942・Prime Market・Construction
Business
Kandenko Co., Ltd. is a comprehensive facility construction company founded in 1944, specializing in electrical and piping works, and listed on the Prime Market of the Tokyo Stock Exchange. The company is composed of Kandenko itself and 30 consolidated subsidiaries, with facility construction (98.6% of net sales) as its core business, alongside electrical equipment sales, real estate, leasing, and power generation businesses. Its main customer is the TEPCO (Tokyo Electric Power Company) Group (24.4% of net sales), and it handles four fields: indoor wiring and environmental facility construction, information and telecommunications construction, distribution line construction, and civil engineering-related construction. The company responds to diverse private-sector construction demand including AI and semiconductor factories, data centers, renewable energy facilities, and large-scale redevelopment projects, while also stably receiving orders for power transmission and distribution facility renewal work from electric power companies.
Business Model
Adopts a contract-based model in which contracted construction work is performed and revenue is recognized as net sales of completed construction contracts. Revenue is recognized using the input method based on progress. As of the end of March 2026, non-consolidated backlog carried over to the next period reached ¥673,681 million, functioning as a leading indicator for next-period sales. A continuing business relationship with the TEPCO Group forms a stable revenue base, and the structure is such that, during phases of expanding private-sector construction investment, the accumulation of high-margin projects leads to improved profit margins.
Company Strengths
Sales to the Tokyo Electric Power Group reached ¥181,094 million (24.4% of consolidated net sales) in FY2026 (ending March 2026), up from ¥167,477 million in the previous fiscal year. On a non-consolidated basis, completed construction contracts revenue from the group also accounted for ¥153,110 million (24.0%). The company continues to receive orders for aging countermeasure work and resilience-enhancement work on transmission and distribution facilities, reflecting a stable order relationship built on the social mission of maintaining power infrastructure.
Non-consolidated backlog of construction contracts carried forward to the next fiscal year stood at ¥673,681 million as of the end of March 2026 (an increase of ¥93,746 million from ¥579,935 million at the end of the previous fiscal year). This was mainly comprised of indoor wiring and environmental facility construction (¥471,735 million) and engineering-related construction (¥141,080 million). This backlog is roughly on par with the projected completed construction contracts revenue for the next fiscal year of ¥674,000 million, indicating that the majority of next year's sales are already secured.
As a result of promoting thorough profit/loss and progress management through division of labor and centralized on-site information, the consolidated operating margin improved to 11.2% in FY2026 (ending March 2026), up from 8.7% in the previous fiscal year. This represents an improvement of roughly 5 percentage points over four years from 6.2% in FY2022 (ended March 2022), confirming numerically that optimization of the construction execution system and productivity improvement measures have contributed to a structural improvement in profit margins.
ENVALITH's Perspective
Performance Trend
Revenue increased approximately 50% over five periods, from ¥495,567 million in FY2022 to ¥742,022 million in FY2026 (ending March 2026). Operating profit expanded roughly 2.7-fold over the same period, from ¥30,643 million to ¥83,140 million, with the operating margin sharply improving from 6.2% to 11.2%. Both the FY2026 revenue growth rate of 10.4% and operating profit growth rate of 42.5% remained at high levels. External factors driving performance included expanding private-sector construction investment for AI, semiconductor plants, and data centers, along with an increase in planned equipment renewal work by electric power companies under the revenue cap system. Comprehensive income was revised (post-correction) from ¥75,600 million to ¥75,742 million due to correction of an aggregation error in the land revaluation difference.
Growth Strategy
Medium-term management plan targets achieved ahead of schedule through DX, green innovation, and human resource enhancement; focus now shifts to setting the next set of targets
By capturing robust digital infrastructure investment demand and increasing the proportion of high-margin private-sector construction work, the company accelerated improvement in overall profitability. In FY2026 (ending March 2026) as well, this demand functioned as a key driver of business expansion.
Planned equipment renewal work by power utilities is expected to arise stably over the medium to long term under the revenue cap system. Leveraging its strong business relationship with the TEPCO group, the company will continue to secure stable orders.
The company aims to improve productivity and construction profitability amid a labor shortage environment by digitalizing construction management and expanding/embedding back-office functions. This initiative continues to be promoted as a measure contributing to structural improvement in profit margins.
The company is strengthening proposal-based sales for energy-saving renovations of existing buildings, disaster prevention equipment renewal, and BCP-related construction work, developing a stable source of orders that does not depend on new construction demand. It is also promoting the capture of demand related to green innovation.
Last updated: July 19, 2026