ENVALITH
日本ギア工業株式会社 logo

NIPPON GEAR CO.,LTD.

6356・Standard Market・Machinery

Official website
日本ギア工業株式会社 logo
NIPPON GEAR CO.,LTD.6356

Business

Nippon Gear Co., Ltd., founded in 1938, is a specialty manufacturer of gear equipment. The company operates through two segments: the Gear and Gear Equipment Business, whose core products are Valve Actuators, Jacks, Speed Increasers/Reducers, and Gears (Various Types), and the Construction Business, which handles maintenance and construction work for these products. Its major customers span a wide range of industrial infrastructure fields, including thermal and nuclear power plants, oil and gas, railways and shipping, and automobiles and construction machinery. Backed by a technical alliance with Flowserve US, Inc. (through June 2028), the company maintains its competitiveness in the Valve Actuator field, and is listed on the Standard Market of the Tokyo Stock Exchange.

Business Model

Of net sales of ¥9,884 million, the Gear and Gear Equipment Business accounted for ¥7,513 million and the Construction Business accounted for ¥2,370 million. The Construction Business is highly profitable with an operating margin of 32.5%, and after-sales service demand arising from the continued operation of existing products forms a stable earnings base. A circular model that builds a customer base through product sales and captures long-term maintenance demand underpins the stability of earnings.

Company Strengths

Valve Actuator products have a long track record of delivery to thermal and nuclear power plants, and in FY2026 (ending March 2026), sales to thermal and nuclear power plants increased 11.3% year on year. Cumulative production of electric actuators reached 300,000 units as of 2010, and deep customer relationships with power plants form the basis for continued order intake.

In FY2026 (ending March 2026), the Construction Business posted net sales of ¥2,370 million against segment profit of ¥771 million, achieving an operating margin of 32.5%. Maintenance demand associated with the continued operation of existing products is relatively insensitive to economic fluctuations, and leading indicators have also improved, with order intake of ¥2,688 million (up 11.7% year on year), functioning as a stable source of high profitability.

The company has entered into a manufacturing and sales agreement and technical documentation provision agreement for Valve Actuator products with Flowserve US, Inc. (through June 2028), incorporating internationally recognized technology into its products. In addition, the company is advancing R&D on next-generation electronic actuators (compatible with IoT, wireless communication, and international explosion-proof standards), confirming its ongoing efforts toward technological differentiation.

ENVALITH's Perspective

In FY2026 (ending March 2026), net sales reached ¥9,884 million (up 3.4% year on year), operating income was ¥2,457 million (up 16.7%), and net income attributable to owners of parent was ¥1,751 million (up 13.0%), achieving increased revenue and substantial profit growth. While cost of sales decreased 4.0% year on year, selling, general and administrative expenses increased 8.7% due to the lump-sum recognition of actuarial differences related to prepaid pension expenses (unfavorable variance of ¥43 million) among other factors, but the expansion of gross profit absorbed this increase. As an external factor, the recovery in demand from thermal and nuclear power plants supported earnings.

The company's forecast for FY2027 (ending March 2027) is net sales of ¥10,000 million (up 1.2% year on year), operating income of ¥2,500 million (up 1.7%), and net income of ¥1,760 million (up 0.5%), indicating that while revenue will continue to grow, profit growth is expected to slow. The increase in depreciation expenses associated with large-scale seismic retrofitting work at the Fujisawa Plant, construction of a new heat-treatment building, and equipment/machinery renewal is explicitly cited as a factor pressuring profits, and it should be noted that the shift into an investment phase constitutes a constraint on short-term profit growth.

Order intake for FY2026 (ending March 2026) of ¥10,984 million exceeded net sales by approximately ¥1,100 million, and the favorable structure in which the accumulation of the order backlog underpins sales in subsequent periods is a positive. On the other hand, according to information on major customers for the fiscal year under review, net sales to Seiwa Co., Ltd. reached ¥732 million in the Gear and Gear Equipment Business and ¥497 million in the Construction Business, totaling over ¥1,229 million, and the high degree of dependence on this specific customer is a risk factor that requires ongoing monitoring.

Growth Strategy

Pursuing sustainable growth through three pillars: new product development, facility renewal, and overseas customer development

The company continues to focus on developing new electronic actuator products while advancing overseas customer development. In FY2026 (ending March 2026), orders for valve actuators for thermal power plants and oil and gas applications increased 14.5% year on year, with improved product competitiveness contributing to order expansion.

Large-scale seismic reinforcement work and construction of a heat treatment building at the aging Fujisawa Plant continued in fiscal 2026. Equipment and machinery upgrades are also being carried out in parallel to improve production capacity and quality. Depreciation expenses are expected to increase as a result, temporarily suppressing profit growth in FY2027 (ending March 2027).

Expanding prime contractor orders for maintenance work for thermal and nuclear power plants is being pursued as a medium-term strategy. Orders received in the Construction Business for FY2026 (ending March 2026) expanded to ¥2,688 million (up 11.7% year on year), with progress also being made in capturing new demand from the aerospace sector.

Last updated: July 19, 2026