ENVALITH
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Azbil Corporation

6845・Prime Market・Electric Appliances

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アズビル株式会社 logo
Azbil Corporation6845

Business

Azbil Corporation (azbil Group) upholds the philosophy of "human-centered automation" and operates across three segments: the Building Automation (BA) Business for the building market, the Advance Automation (AA) Business for the industrial market, and the Life Automation (LA) Business for lifeline infrastructure and residential use. The company provides an integrated offering spanning the development and manufacturing of products such as sensors, controllers, and valves, through to instrumentation design, engineering, maintenance services, and energy-saving solutions, serving a broad customer base including office buildings, factories, plants, and gas and water infrastructure. In FY2026 (ending March 2026), consolidated net sales are projected at ¥298,930 million, with an operating margin reaching 15.8%.

Business Model

Starting from new product installations, the company builds up a 'stock business' comprising service revenue from existing equipment renovation, maintenance, and energy-saving solutions, forming a stable revenue base. In the BA Business, the company provides integrated services from instrumentation design through operational management; in the AA Business, it continuously captures maintenance and renovation demand; and in the LA Business, it leverages statutory replacement demand as a foundation to expand service revenue such as SMaaS (Smart Metering as a Service). Combined with profitability-enhancement measures including price pass-through, the company has achieved continuous improvement in its operating margin.

Company Strengths

The company has established a system providing consistent service from product development to maintenance across diverse markets such as office buildings, factories, plants, and gas/water infrastructure. In FY2026 (ending March 2026), BA Business sales were ¥156,351 million and AA Business sales were ¥110,726 million, with diversification across multiple markets enhancing resilience to economic fluctuations. Recurring-revenue business built on long-standing customer relationships underpins stable earnings.

The company has expanded the MEMS clean room at the Fujisawa Technology Center and is advancing R&D across five domains: systems, cloud, AI, actuators, and devices. R&D expenses in FY2026 (ending March 2026) totaled ¥12,713 million (4.3% of net sales). The company has launched proprietary products to market such as the AI-driven optimal production planning system "VIRTUAL PLANNER PP" and the anomaly prediction detection system "BiG EYES MM," and has received the Technology Award and New Product Development Award from the Society of Instrument and Control Engineers.

As of the end of FY2026 (ending March 2026), the equity ratio stood at 76.1%, with total net assets of ¥255,999 million. The company has obtained an issuer rating of "A+ (Stable)" from Rating and Investment Information, Inc., and has secured a bond issuance framework of ¥20 billion, a CP issuance framework of ¥20 billion, and a commitment line of ¥10 billion. Operating cash flow was abundant at ¥380,320 million (FY2026, ending March 2026), giving the company a financial foundation that supports both growth investment and shareholder returns.

ENVALITH's Perspective

The BA Business order backlog stood at ¥98,792 million, up ¥8,441 million year on year, with a substantial construction backlog accumulating against the backdrop of continued domestic urban redevelopment demand (as an external factor). The BA Business revenue forecast for FY2027 (ending March 2027) is ¥166.0 billion (up 6.2% year on year), representing the largest revenue increase among all segments. With additional growth in the existing-building/services field and overseas operations, the medium-term revenue growth trend is judged to be sustained.

Net income attributable to owners of the parent for FY2026 (ending March 2026) came to ¥38,565 million (down 5.8% year on year), but this was mainly due to the disappearance of a one-time effect from the prior period, when a gain of approximately ¥7.6 billion on the transfer of the equity interest in azbil Telstar was recorded as extraordinary income. Ordinary income rose substantially to ¥48,760 million (up 15.6% year on year), clearly demonstrating an improvement in underlying business earnings power. The IFRS-basis net income forecast for FY2027 (ending March 2027) is ¥35,300 million, projected to fall below the prior year's actual results; however, this is an estimated figure that includes the impact of accounting standard changes (such as the elimination of goodwill amortization), so caution is warranted when making simple comparisons.

The FA market in the AA Business turned toward recovery from the second half of the fiscal year, but with variation by region and market, the overall recovery remained modest. For FY2027 (ending March 2027), a recovery in FA demand is expected in markets such as semiconductor manufacturing equipment, but concerns remain over the impact on resource prices, logistics, and procurement stemming from heightened tensions in the Middle East (as an external factor). The AA Business's operating profit forecast for FY2027 (ending March 2027) is expected to remain at roughly the same level as the previous year (¥17.2 billion), as rising material costs, higher labor costs, and the reversal of high-profit projects from the prior period are expected to weigh on profit margins.

Growth Strategy

In the Medium-Term Management Plan (FY2025–FY2027), the company aims for net sales of ¥340.0 billion, operating profit of ¥51.0 billion, and ROE of 14%

Backed by a substantial order backlog (¥98,792 million), the company is advancing workload leveling and construction efficiency improvements through DX promotion, aiming to increase revenue centered on the renovation and services field for existing buildings. It is also concurrently strengthening solutions for the data center market and expanding overseas business. BA Business net sales for FY2027 (ending March 2027) are forecast at ¥166.0 billion (up 6.2% year on year).

Through the creation of Shin-Automation utilizing proprietary technologies such as MEMS Sensor & Automatic Control Valve Technology and plant autonomization, the company addresses social needs including decarbonization, advanced production, and labor shortages. Building on stable demand in the domestic PA market, it is accelerating overseas business growth, while also anticipating capturing the recovery of the FA market.

Building on stable statutory replacement demand based on the Measurement Act, the company is promoting the SMaaS (Smart Metering as a Service) business to expand service revenue. It is also advancing development of the smart water metering market through the collaboration between Azbil Kimmon and Kamstrup A/S (Denmark). LA Business profit for FY2027 (ending March 2027) is expected to increase by approximately ¥0.4 billion year on year to ¥1.0 billion.

The company will voluntarily adopt IFRS from the first quarter of FY2027 (ending March 2027) to strengthen information disclosure to global investors. It is implementing share buybacks of up to ¥20,000 million (up to 32 million shares) (May to October 2026) and an annual dividend of ¥50 per share for FY2027 (ending March 2027) (ordinary dividend of ¥38 plus commemorative dividend of ¥12), aiming to improve ROE and expand shareholder returns.

Under the Medium-Term Management Plan (FY2025–FY2027), the company is making active investments in strengthening human capital, reinforcing the global development and production system, enhancing product competitiveness including collaboration with other companies, and promoting DX. While allowing for increases in R&D expenses, DX-related expenses, and personnel costs, it is building a revenue structure that absorbs these through price pass-through. The long-term target (FY2030) is net sales of ¥420.0 billion, operating profit of ¥65.0 billion, and ROE of 15%.

Last updated: July 19, 2026