NIKKATO CORPORATION
5367・Standard Market・Glass & Ceramics Products
Business
Nikkato Corporation is a long-established ceramics manufacturer founded in 1913, operating two business segments: the Ceramics Business (72.4% of net sales), which manufactures ceramics products (Wear-resistant Ceramics, Heat-resistant Ceramics, Functional Ceramics, and Laboratory Ceramics & Others) in-house at its Sakai Plant and Higashiyama Plant for supply to industries such as electronic components, food, pharmaceuticals, and paints; and the Engineering Business (27.6%), a trading-company-type business that purchases and sells Heating Equipment and Measuring Instruments & Others. Its main customers are electronic component manufacturers, and it primarily supplies consumables used in the manufacturing processes of MLCCs and other components essential for smartphones and for the EV-ification and autonomous driving of automobiles. The company is listed on the Standard Market of the Tokyo Stock Exchange.
Business Model
In the Ceramics Business, products are manufactured in-house at two plants, Sakai and Higashiyama, and sold on an ongoing basis as tools and machine parts that are consumed in the production processes of electronic component manufacturers and others, thereby securing stable earnings. The Engineering Business operates a trading-company-type model without its own manufacturing plants, keeping fixed costs low while selling Heating Equipment and measuring instruments to customers in the automotive, heavy machinery, and steel-related industries. The two businesses aim to comprehensively address customer needs through synergies between them.
Company Strengths
The company possesses "foundational technology" and "core technology" cultivated over 110-plus years since its founding in 1913, and has built an in-house integrated manufacturing system at the Sakai Plant and Higashiyama Plant. It succeeded in industrializing Japan's first Oxide Ceramics in 1937 and received the Okochi Memorial Technology Prize in 1970, providing a track record that substantiates its technological first-mover advantage.
The Ceramics Business has a fixed-cost-oriented manufacturing cost structure, meaning that increased plant utilization driven by higher orders translates directly into improved cost ratios. In FY2026 (ending March 2026), reflecting a recovery in the electronic components market, the cost of sales ratio improved by 3.6 percentage points year on year, and segment profit increased 86.0% year on year to ¥834 million.
As of the end of FY2026 (ending March 2026), outstanding borrowings stood at a low ¥506 million, while cash and cash equivalents totaled ¥4,138 million. Net assets were ¥14,137 million (equity ratio of approximately 75%), indicating high financial soundness, and operating cash flow generated a stable ¥1,675 million. The company has a financial foundation capable of funding capital expenditure and R&D from its own resources.
ENVALITH's Perspective
Performance Trend
Revenue moved from ¥9,979 million in FY2022 to ¥10,733 million in FY2023 (peak) → ¥10,239 million in FY2024 → ¥10,077 million in FY2025, declining for two consecutive periods, before rebounding to a record-high ¥11,341 million in FY2026 (ending March 2026) (up 12.5% year on year). Operating profit also recovered sharply, rising 67.9% year on year from ¥638 million in FY2025 to ¥1,071 million. The main drivers were increased orders resulting from a recovery in the electronic components market (an external factor) and a resulting improvement in factory utilization rates, which improved the cost of sales ratio by 3.6 percentage points. The Engineering Business also performed well on the back of robust capital investment demand from the automotive and heavy machinery sectors (an external factor), achieving revenue growth of 17.0% and profit growth of 25.0% year on year. For FY2027 (ending March 2026), the company has issued conservative guidance of ¥11,000 million in revenue and ¥1,100 million in operating profit.
Growth Strategy
In the medium-term plan CONNECT30, the company has set FY2030 targets of ¥10,000 million for the Ceramics Business, ¥3,000 million for the Engineering Business, and an operating margin of 15%
The company is expanding sales of high value-added Functional Ceramics products, mainly for electronic components, aiming for FY2030 sales of ¥10,000 million. In FY2026 (ending March 2026), sales reached ¥8,215 million, achieving 82% of the target level. Cost ratio improvement driven by higher capacity utilization is also progressing.
The company is promoting expanded sales of Heating Equipment and Measuring Instruments & Others, along with improved profit margins for measuring instruments. In FY2026 (ending March 2026), sales reached ¥3,125 million (up 17.0% year on year), already surpassing the FY2030 target of ¥3,000 million. Segment profit margin also improved to 7.6%.
The company continues to enhance and rationalize its production systems and renew existing equipment. In FY2026 (ending March 2026), the increase in tangible and intangible fixed assets was ¥626 million (down from ¥831 million in the previous fiscal year). Improved capacity utilization through capital investment and cost ratio improvement are directly contributing to improved profitability.
Toward the FY2030 target of a 15% operating margin, the company is promoting higher capacity utilization, expanded sales of high value-added products, and greater efficiency in SG&A expenses. In FY2026 (ending March 2026), the margin improved to 9.4%, but a gap of 5.6 percentage points remains versus the target. Implementing structural profitability improvement measures remains a challenge.
The company itself recognizes that its PBR is below 1x, and has clearly stated a policy of linking sustainable growth-driven enhancement of corporate value to share price improvement. For FY2027 (ending March 2027), the company plans to increase the dividend to ¥23 per share (up ¥2 year on year), with an expected dividend payout ratio of 34.4%.
Last updated: July 19, 2026