NICHIREKI GROUP CO., LTD.
5011・Prime Market・Oil & Coal Products
Business
Nichireki Group Co., Ltd. is a road infrastructure-specialized holding company (transitioned to holding company structure in October 2024) founded in 1943. With 40 consolidated subsidiaries and 4 affiliated companies, it operates on two pillars: the manufacturing and sales of Asphalt Emulsion, Modified Asphalt, and other products (Asphalt Applied Processed Products Business), and the contracting of paving, civil engineering, and bridge waterproofing construction (Road Paving Business). Its main customers are public sector clients such as national and local governments, and its primary market is public works demand driven by disaster prevention, disaster mitigation, and national resilience initiatives. The company advocates a solutions-based business model that integrally handles the process from "investigation/diagnosis → design/proposal → manufacturing/sales → construction/management," and operates through an area-based management system across 9 areas nationwide.
Business Model
A vertically integrated model in which Nichireki Co., Ltd., which manufactures and sells asphalt applied processed products within the group, and Nichireki Road Co., Ltd. and 37 other companies, which carry out road paving construction, work in organic coordination. The structure secures a double margin—product margin and construction margin—through internal supply from the Materials segment to the Construction segment (internal sales of ¥33,343 million). The main source of earnings is stable public works orders, and unit prices are improved through proposal-based sales of high-value-added products and construction methods.
Company Strengths
The Asphalt Applied Processed Products Business (external sales of ¥24,721 million) and the Road Paving Business (sales of ¥50,827 million) operate as an integrated unit, and internal supply of materials (totaling ¥33,343 million including inter-segment sales) enables margins to be secured in both products and construction. This vertically integrated supply chain, which is difficult for competitors to replicate in a short period, forms the foundation for earnings stability.
Under an area-based management structure covering 9 regions nationwide, 38 consolidated subsidiaries carry out paving and waterproofing construction work. As of FY2026 (ending March 2026), the order backlog for the Road Paving Business had accumulated to ¥9,378 million (up 5.7% year on year), providing a backlog structure that secures a certain level of sales for the following period and beyond.
Under the basic policy of "developing creative and original products and construction methods," the company invested ¥792 million in research and development in FY2026 (ending March 2026). It has continuously brought to market original products and construction methods such as long-life Modified Asphalt, modifiers for porous asphalt, cold-applied surface treatment materials, and the no-joint construction method, and this technological differentiation supports the maintenance and expansion of its customer base.
ENVALITH's Perspective
Performance Trend
Revenue bottomed out in FY2024 (ending March 2024) (¥73,832 million) and has recovered for two consecutive periods, reaching ¥75,853 million in FY2026 (ending March 2026) (up 0.1% year on year). However, operating profit fell for the first time in two periods to ¥5,920 million (down 5.5% year on year), remaining approximately 31% below the peak of ¥8,566 million recorded in FY2022 (ending March 2022). As an external factor, rising crude oil prices and yen depreciation continued to push up raw material costs, and SG&A expenses also increased to ¥11,958 million (from ¥11,070 million in the previous period). Ordinary profit dropped sharply by 13.8%, weighed down by a sharp decline in equity in earnings of affiliates (from ¥463 million to ¥65 million) coupled with a sharp increase in interest expenses (from ¥34 million to ¥268 million). For FY2027 (ending March 2027), the company forecasts revenue of ¥80,000 million and operating profit of ¥6,000 million, a cautious outlook premised on crude oil at $100/barrel and an exchange rate of ¥160/dollar.
Growth Strategy
Aiming for sustainable growth through three pillars: high-value-added products, development of advanced production and logistics hubs, and overseas expansion
Promoting design and order-taking activities for high-value-added products that emphasize "extended service life and enhanced performance" and "reduced environmental impact," along with surveys and construction methods utilizing ICT technology. In FY2026 (ending March 2026), the gross profit margin improved to 23.6%, indicating that differentiation through technological capability and price pass-through are functioning to a certain extent even amid rising raw material prices.
As a large-scale capital investment, buildings and structures increased by ¥14,940 million year on year (period-end balance of ¥34,006 million), and the increase in tangible and intangible fixed assets reached ¥17,874 million. Investment is nearing completion of a cycle (construction in progress decreased from ¥10,666 million to ¥6,948 million), and going forward, focus will shift to managing the profit contribution and depreciation burden after the facilities become operational.
Investment in equity-method affiliates increased to ¥1,522 million (¥1,433 million in the previous fiscal year), and efforts toward overseas expansion continue. However, equity in earnings of affiliates for FY2026 (ending March 2026) fell sharply to ¥65 million (¥463 million in the previous fiscal year), indicating that the profit contribution from overseas business remains limited at present.
Last updated: July 19, 2026