NS Solutions Corporation

Business Details

The Group operates as a single segment in the information services business. It provides integrated services from consulting through development, construction, and operation, centered on two areas: "Business Solutions" (industry-specific SI for industrial/steel, distribution, finance, and other sectors) and "Consulting & Digital Services" (high-value-added digital services utilizing cloud, security, and AI). Its largest customer is Nippon Steel Corporation (¥70,555 million, equivalent to 18.5% of revenue for the fiscal year under review). The parent company is Nippon Steel Corporation.

Recent Overview

Achieved higher revenue (up 12.7%) and higher operating profit (up 14.9%), driven partly by the consolidation of Infocom Corporation

In the fiscal year ended March 2026, revenue increased to ¥381,340 million (up ¥43,038 million year on year) and operating profit rose to ¥44,242 million (up ¥5,744 million year on year), representing higher revenue and profit. The Business Solutions segment led the growth, reaching ¥286,506 million (up ¥43,042 million year on year), driven by strength in the industrial/steel and distribution segments as well as the new consolidation of Infocom Corporation (acquisition cost of ¥55,088 million; became a 100%-owned subsidiary effective July 1, 2025). On the other hand, a temporary increase in income tax payments of ¥49,246 million related to the sale of investment securities in the prior period caused operating cash flow to turn negative, at ¥(3,409) million. Goodwill of ¥31,823 million and intangible assets of ¥32,580 million were recorded on the balance sheet. For the fiscal year ending March 2027, the company forecasts revenue of ¥417,000 million and operating profit of ¥47,500 million.

Key Products

Growth Drivers

• Steady growth in client companies' system investment amid robust DX demand
• Additional contribution to revenue and profit from the consolidation of Infocom Corporation as a subsidiary (effective July 1, 2025; acquisition cost of ¥55,088 million), with revenue of ¥22,634 million and profit of ¥1,490 million contributed since the acquisition date
• Improvement in gross margin driven by the shift toward the TAM-based business model (SI Transformation, Asset Driven, Multi Company Platform), with the TAM-type revenue mix at 38% in the current period versus a fiscal 2027 target of 75%
• Increased revenue in the industrial/steel segment (driven by strength in manufacturing and support for Nippon Steel Corporation's new facilities) and the distribution/platformer segment (driven by strength in retail and travel)
• Strong demand for asset-utilization type (Type A) solutions such as PPMP, ConSeek TM, CloudHarbor, and Delifit AI
• Active M&A and external growth strategy based on the "2025-2027 Medium-Term Management Plan," including the acquisition of a 100% stake in Indonesia's Avicenna and capital and business alliances with Intelligent Force and Delivery Consulting
• Establishment of an India Utilization Promotion Team (January 2026) to incorporate IT resources from India and strengthen the global development structure
• Improvement in cost ratio through enhanced development productivity (targeting a 20% improvement by fiscal 2027) using Nestorium and NS Devia

Risks

• Increase in selling, general and administrative expenses (¥58,057 million in the current period versus ¥41,071 million in the prior period) due to expanded investment for business model transformation
• Risk of impairment of goodwill (¥28,432 million) and intangible assets (including identifiable customer-related assets of ¥26,963 million) arising from the acquisition of Infocom Corporation
• Operating cash flow turning negative (¥(3,409) million) due to a temporary increase in income tax payments (¥49,246 million in the current period) associated with the sale of investment securities in the prior fiscal year
• Uncertainty over the impact on client companies' earnings from heightened geopolitical risk (e.g., Middle East situation), U.S. tariff policy, and continued domestic price increases
• Customer concentration risk due to reliance on sales to the Nippon Steel Corporation group (¥70,555 million, 18.5% of revenue for the fiscal year under review)
• Impact on profitability from IT talent shortages and rising recruitment and training costs
• Litigation and legal risk, exemplified by a settlement payment of ¥5,000 million in the current period
• Risk of slowing growth in some areas, as reflected in the roughly flat revenue in the Consulting & Digital Services segment (¥94,833 million versus ¥94,837 million in the prior period)