Mitsubishi Electric Corporation
6503・Prime Market・Electric Appliances
Business
The Mitsubishi Electric Group is a comprehensive electric equipment manufacturer founded in 1921, a global corporate group comprising 256 consolidated subsidiaries and 38 equity-method affiliates. It operates across five segments: Infrastructure (Social Infrastructure Systems, Defense & Space), Industry & Mobility (FA and automotive equipment), Life (Air Conditioning & Home Appliances, Building Systems), Digital Innovation (IT/DX), and Semiconductor Devices (power and optical devices). Its customer base spans a wide range, from government and defense agencies to manufacturing, construction, and general consumers, supported by a global sales network covering Japan, North America, Europe, and Asia. FY2025 revenue reached ¥5,894,747 million, achieving all targets set under the previous medium-term management plan.
Business Model
The company positions "circular digital engineering"—combining product and component sales with recurring stock businesses such as maintenance and operations management—as a pillar of earnings. Through the Serendie (Digital Platform), it continuously acquires and utilizes customer operational data, providing new solutions to build long-term relationships with customers. It has a multi-layered revenue structure combining one-time sales, such as large-scale orders for defense and infrastructure, with recurring revenue, such as maintenance contracts for air conditioning and elevators and digital services for FA Systems (Control & Drive Equipment).
Company Strengths
The company holds six segments with different business cycles including Infrastructure, FA, Air Conditioning, and Semiconductors, allowing underperformance in specific businesses to be offset by other businesses. In FY2025 (ending March 2025), the company achieved increased profit across all segments, recording net sales of ¥5,894,747 million and operating profit of ¥433,095 million. It has achieved stable growth while diversifying the risk of dependence on a single business.
In the Defense & Space Systems Business, the company secured large-scale projects against a backdrop of increasing government-related budgets, and the Infrastructure segment achieved net sales of ¥1,463,400 million (119% year-on-year) and an operating margin of 10.6%. Its accumulated track record of participation in national projects, including the development and delivery of equipment installed on the greenhouse gas observation satellite "IBUKI GW" ordered by JAXA, forms an entry barrier.
In the Semiconductor Devices segment, the company invested ¥105,131 million in capital expenditure in FY2025 (ending March 2025) (more than 3 times the previous period) to build a system for increased production of SiC power devices. The operating margin improved from 14.2% to 16.6%, and optical communication devices are capturing expanding demand from data centers. Order intake is on a recovery trend at 119% year-on-year, and the company possesses an in-house foundation to respond to GX and DX demand.
ENVALITH's Perspective
Performance Trend
In FY2026 (ending March 2026), the company achieved revenue of ¥5,894,747 million (up 6.8% year on year), operating profit of ¥433,095 million (up 10.5%), and net profit attributable to owners of parent of ¥407,758 million (up 25.8%), marking five consecutive years of increased revenue and profit. External factors such as yen depreciation (average rate of ¥151/USD during the period) and price improvement effects pushed up revenue, while the cost of sales ratio improved by 1.5 percentage points year on year to 67.9%. Share of profit of investments accounted for using the equity method increased significantly to ¥69,631 million (up 78.6% year on year), boosting profit before tax. On the other hand, other profit and loss deteriorated to negative ¥68,114 million due to the recording of special retirement benefits and other factors. Comprehensive income for the period surged to ¥783,381 million (up 107.7% year on year), driven mainly by remeasurement of defined benefit plans of ¥194,431 million and exchange differences on translation of foreign operations of ¥164,240 million. ROE was 9.7% (up from 8.4% in the previous period) and operating margin was 7.3% (up from 7.1%), indicating continued improvement in profitability.
Growth Strategy
Enhancing corporate value through ROIC-based management, Serendie digital transformation, and concentrated investment in priority growth businesses
Continuing ROIC-based management at all organizational levels by clarifying KPIs and responsible units through ROIC tree deployment. Aiming to improve asset efficiency and cash generation capability. ROE for FY2026 (ending March 2026) improved to 9.7% (vs. 8.4% in the previous fiscal year), with operating cash flow of ¥575,993 million, achieving steady cash generation.
Promoting the realization and expansion of circular digital engineering utilizing the Serendie digital platform, driving a business model transformation from component sales to digital services. Digital Innovation segment revenue continued to grow, reaching ¥158.0 billion (108% year-on-year).
Against a backdrop of expanding defense budgets, growing renewable energy demand, and social infrastructure renewal, capital expenditure in the Infrastructure segment was expanded to ¥60.7 billion (176% year-on-year). Achieved high profitability in FY2026 (ending March 2026) with operating profit of ¥154,731 million (operating margin of 10.6%). The plan for FY2027 (ending March 2027) calls for revenue of ¥1,640.0 billion (112% year-on-year) and adjusted operating profit of ¥170.0 billion (109% year-on-year).
Executed capital expenditure of ¥105.1 billion (315% year-on-year) in FY2025 to strengthen the growth foundation for GX, centered on SiC power devices. Order intake is on a recovery trend at 119% year-on-year. No disclosure was made regarding the scale of combined tangible fixed assets and right-of-use asset capital expenditure for the FY2026 plan. The plan for FY2027 (ending March 2027) targets revenue of ¥300.0 billion (104% year-on-year) and adjusted operating profit of ¥43.0 billion (93% year-on-year).
Executed strategic M&A, including the consolidation of Nozomi Networks, Inc. (strengthening OT security) and the consolidation of a Middle East affiliate (expanding the Building Systems business). Expenditure on the acquisition of subsidiaries in FY2026 (ending March 2026) accelerated to ¥158,125 million (approximately 23.6 times the previous fiscal year). Mitsubishi Electric Information Systems Corporation and Mitsubishi Electric IT Solutions Corporation were excluded from the scope of consolidation.
Last updated: July 19, 2026