Hitachi, Ltd.
6501・Prime Market・Electric Appliances
Business
Hitachi, Ltd. is a global conglomerate with 606 consolidated subsidiaries and 217 equity-method affiliates, generating revenue of ¥10,586,781 million. The company positions its four sectors—Digital Systems & Services, Energy, Mobility, and Connective Industries—as growth areas, leveraging its unique strength in integrating IT, OT, and products. Its main customers are operators across a wide range of social infrastructure domains, including electric power, railways, manufacturing, finance, and the public sector, and it addresses social challenges through global operations spanning 190 countries. Through the expansion of digital solutions centered on Lumada, the company aims to become "a global leader that continues to innovate social infrastructure through digital technology."
Business Model
The company positions its globally deployed products and IT systems as "digitalized assets," analyzing real-time data collected from them using AI and domain knowledge, and continuously delivering the results as "Digital Services (HMAX)" — the core of the Lumada 3.0 model. The provision of digital services forms a value-creation cycle that drives expanded product sales and reinforces the data-collection infrastructure, and the company aims to build a structure that increases the share of high-margin, recurring-type business.
Company Strengths
The Annual Securities Report explicitly states that no other company in the world possesses, as an integrated whole, on-site OT expertise spanning 190 countries, 116 years of product development track record, and advanced digital technology (IT). Through acquisitions such as GlobalLogic (digital engineering) and Hitachi Energy (power grid), the company has built a business foundation combining global domain knowledge with digital talent that is difficult for competitors to replicate.
In FY2026 (ending March 2026), HMAX's revenue reached approximately ¥300,000 million, achieving an Adjusted EBITA margin of over 20%. The Adjusted EBITA margin for the Lumada business as a whole significantly exceeded the company-wide average of 12.4%, and the expansion of high-profitability businesses is progressing toward the long-term target of "Lumada 80-20" (80% revenue ratio, 20% Adjusted EBITA margin).
As of the end of FY2026 (ending March 2026), interest-bearing debt stood at ¥10,090 million, while equity attributable to owners of the parent expanded to a scale of ¥65,683,000 million. The company maintains high credit ratings of A2 from Moody's, A from S&P, and AA from R&I, and secures an unused commitment line balance of ¥505.0 billion. Core free cash flow remained at a high level of ¥1,170.2 billion, underpinning a financial foundation that supports both growth investment and shareholder returns.
ENVALITH's Perspective
Performance Trend
Revenue recovered and expanded at an accelerating pace, bottoming out at ¥9,728,716 million in FY2024, rising to ¥9,783,370 million in FY2025, and reaching ¥10,586,781 million in FY2026. Adjusted operating income for FY2026 came to ¥1,199,275 million (up 23.4% year on year), Adjusted EBITA rose to ¥1,311,436 million (up 21.0%), and net income attributable to owners of the parent increased to ¥802,368 million (up 30.3%), representing substantial improvement across all metrics. Externally, expanding global demand for power grid solutions and the weaker yen (European sales at 120% of the prior period) boosted performance. ROE improved to 12.9% (from 10.7% in the prior period), and the Adjusted EBITA margin on revenue rose to 12.4% (from 11.1%), reflecting improved profitability metrics as well. Operating cash flow reached ¥1,668,061 million, with notable working capital improvement driven by increased advance payments received, significantly enhancing cash generation capacity.
Growth Strategy
Expanding the Lumada business to global scale through the three pillars of Digital, Green, and Innovation
From the beginning of FY2026 (ending March 2026), the company implemented a reorganization of its business groups centered on digital, transitioning to a five-segment structure of Digital Systems & Services, Energy, Mobility, and Connective Industries. Using Lumada as a common platform spanning all segments, the company is accelerating the global expansion of social innovation businesses through co-creation with customers.
The company continues to capture power grid demand in the European and North American markets through Hitachi Energy. In FY2026 (ending March 2026), external customer revenue in the Energy segment reached ¥3,200,844 million and Adjusted EBITA reached ¥416,015 million, showing rapid expansion, with high growth continuing against a backdrop of demand for decarbonization and energy transition.
Through the sale of the home appliance business (Hitachi Global Life Solutions) for approximately ¥110,000 million (expected to be completed during FY2026), the company is divesting low-profitability businesses and concentrating management resources on high-profitability businesses. In FY2026 (ending March 2026), the company conducted share buybacks of ¥352,260 million, and has set an additional buyback ceiling of ¥500,000 million. The annual dividend was increased to ¥50 (up from ¥43 in the previous fiscal year), with a dividend of ¥28 planned as of the end of the second quarter of FY2027 (ending March 2027).
Due to improvements in working capital from increased advances received and other factors, free cash flow in FY2026 (ending March 2026) increased by ¥727,918 million year on year to ¥1,326,508 million. While reducing interest-bearing debt and maintaining a D/E ratio of 0.15x, the company has established a financial foundation that enables it to flexibly execute M&A, capital expenditures, and shareholder returns.
Last updated: July 19, 2026