NIKKATO CORPORATION

Business Details

The company's founding segment, manufacturing and selling ceramic products at the Sakai Plant and Higashiyama Plant. Main customers are manufacturers in electronic components, food, pharmaceuticals, paints, and other industries, providing consumable ceramic tools, fixtures, and machine parts used in production processes. Full-year sales for FY2026 (ending March 2026) were ¥8,215 million, accounting for approximately 72.4% of consolidated sales, making it the core business. The medium-term management plan "CONNECT30" sets a sales target of ¥10,000 million for FY2030.

Recent Overview

Sales and profit both improved significantly amid recovery in the electronic components market

In the full year of FY2026 (ending March 2026), the electronic components market, a major sales destination, showed a recovery trend, resulting in sales of ¥8,215 million, up 10.9% year-on-year. Alongside the increase in sales, factory utilization rates improved, and the cost of sales ratio improved by 3.6 percentage points year-on-year, leading to a substantial increase in segment profit of 86.0% year-on-year to ¥834 million. Capital expenditure decreased from ¥828 million in the previous fiscal year to ¥622 million, but investment in enhancing and rationalizing the production system and renewing existing facilities continued.

Key Products

Growth Drivers

• Increased orders driven by the continued recovery in the electronic components market (achieved +10.9% year-on-year sales growth for the full year of FY2026, ending March 2026)
• Decline in cost of sales ratio due to improved factory utilization associated with increased orders (improved by 3.6 percentage points year-on-year for the full year of FY2026, ending March 2026)
• Expanded sales of high-value-added Functional Ceramics products (achieved 46.6% year-on-year growth in FY2025, ended March 2025)
• Continuous investment in enhancing/rationalizing the production system and renewing existing equipment (¥622 million for the full year of FY2026, ending March 2026)
• Promotion of strategic investment toward the ¥10,000 million sales target for FY2030 under the medium-term management plan "CONNECT30"

Risks

• Risk of demand fluctuation due to deterioration in the electronic components market (the slowdown in the first half of FY2025, ended March 2025, directly impacted full-year results)
• Risk of rising cost of sales ratio due to elevated raw material and fuel prices (the cost of sales ratio worsened by 3.4 percentage points year-on-year in FY2025, ended March 2025)
• Risk of spillover to demand for electronic components due to economic deterioration in Asian countries caused by US trade policy (reciprocal tariffs)
• Geopolitical risk from Japan-China political tensions and China's economic stagnation (impact on the electronic components industry, a major customer base)
• Risk of valuation losses on inventories (a valuation loss on inventories of ¥126 million was recorded in FY2026, ending March 2026)