ENVALITH
株式会社ニレコ logo

NIRECO CORPORATION

6863・Standard Market・Electric Appliances

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株式会社ニレコ logo
NIRECO CORPORATION6863

Business

Nireco Corporation, established in 1950, is an industrial equipment manufacturer with three core businesses: the Control Equipment Business (Process Control Equipment for the steel and non-ferrous metals industries, and meandering/tension control devices for film), the Inspection Equipment Business (quality inspection equipment for food and electronic components utilizing image processing technology), and the Optics Business (optical components and laser equipment for semiconductors). The company has seven consolidated subsidiaries in Japan and overseas, with a customer base spanning production lines across diverse industries such as steel, semiconductors, food, printing, and batteries. In October 2025, the company made Oyokoken Kogyo Co., Ltd. a subsidiary, expanding its business domain into the Radiation Measurement Equipment and optical crystal fields.

Business Model

The business is fundamentally a made-to-order model tailored to each customer's production line-specific conditions, with revenue on long-term construction contracts recognized using a cost-based input method. The Control Equipment Business (profit margin 24.3%) and Optics Business (profit margin 35.9%) serve as the pillars of high profitability, with ¥705 million invested in R&D to refine proprietary sensing, image processing, and optical technologies, thereby differentiating from competitors. The funding structure relies primarily on retained earnings and operating cash flow, enabling growth investment while maintaining financial soundness.

Company Strengths

The Optics Business boasts outstanding profitability, with segment profit of ¥1,025 million (profit margin of 35.9%) against sales of ¥2,855 million in FY2026 (ending March 2026). The order backlog reached ¥2,601 million, up 47.0% from the end of the previous fiscal year, confirming an accumulation of future sales driven by strong demand for deep ultraviolet (DUV) optical components for semiconductor applications.

For over 70 years since its founding, the company has accumulated control technology for the steel and film industries, earning high customer trust both domestically and internationally. Leveraging its business alliances with Germany's IMS Group (world's top share in radiation thickness gauges) and the Erhardt+Leimer Group, the company has expanded overseas, including the start of supplying meandering control devices to the Indian market. The order backlog for the Control Equipment Business has grown to ¥3,214 million (up 18.8% from the end of the previous fiscal year).

Because the three businesses—Control Equipment, Inspection Equipment, and Optics—serve customers across different industries such as steel, semiconductors, food, and batteries, the company's structure is less dependent on the capital expenditure cycle of any single industry. In FY2026 (ending March 2026), the company maintained consolidated net sales of ¥11,023 million and operating profit of ¥1,701 million (operating profit margin of 15.4%), and it has a strong financial base with net assets of ¥17,072 million and a high equity ratio.

ENVALITH's Perspective

In FY2026 (ending March 2026), revenue increased to ¥11,023 million (up 2.5% year on year), but operating profit declined to ¥1,701 million (down 10.8% year on year), and the operating margin fell to 15.4% (from 17.7% in the previous fiscal year). The main causes were a rise in cost of sales (accelerating inflation) and an increase in SG&A expenses (¥2,725 million, up ¥133 million year on year), with segment profit declining year on year in both the Optics Business and the Control Equipment Business. Extraordinary income (totaling ¥197 million, comprising gain on sale of fixed assets, gain on sale of securities, and negative goodwill) has supported net profit, and continued attention is warranted on the underlying strength as measured on an ordinary profit basis.

Orders increased by double-digit percentages year on year across all businesses, and the order backlog at fiscal year-end rose substantially to ¥6,637 million (up 28.5% year on year). The company's forecast for FY2027 (ending March 2027) is bullish, projecting revenue of ¥12,500 million (up 13.4%) and operating profit of ¥1,900 million (up 11.7%), and the order backlog level supports the likelihood of achieving this. Meanwhile, the planned capacity expansion investment in the Optics Business (approximately ¥2.0 billion over the next several years, targeting operation by FY2029 (ending March 2029)) implies an increased capital expenditure burden, and continued monitoring of disclosures regarding the timing, scale, and financing method of this investment is necessary.

From FY2027 (ending March 2027), the company will raise its shareholder return policy to "consolidated dividend payout ratio of 50% or more and DOE of 3.0% or more" (previously 45% or more and 2.5% or more), and plans to implement a special dividend of ¥3 per share (bringing the annual dividend to ¥105 per share) in connection with the sale of cross-shareholdings. In FY2026 (ending March 2026), the dividend payout ratio was already 45.2% and DOE was 3.9%, having already achieved the previous target, and the shift to the new policy will contribute to enhancing shareholder value. That said, the equity ratio stood at 82.6% and ROE at 8.6% (down from 9.7% in the previous fiscal year), continuing a trend of declining capital efficiency, and balancing capacity expansion investment with shareholder returns remains a medium-term challenge.

Growth Strategy

Aiming to enhance corporate value through Optics Business capacity expansion investment, M&A, global expansion, and strengthened shareholder returns

To meet strong demand for deep ultraviolet-compatible optical components and laser equipment for semiconductors, the company will implement capital expenditure on the scale of ¥2.0 billion over the coming years. It targets commencement of operations in FY2029 (ending March 2029) to resolve supply constraints and convert its order backlog (¥2,601 million, up 47.0% year-on-year) into sales.

Oyokoken Kogyo, which became a subsidiary in October 2025, had its Radiation Measurement Equipment & Optical Crystals division incorporated into the Inspection Equipment Business and Optics Business. The company will capture demand for radiation measurement associated with the progress of domestic nuclear power plant restarts and promote technological collaboration within the group.

Through collaboration with Germany's IMS Group, which holds the world's top share in radiation thickness gauges, the company has begun sales of the Edge Position Control device (CPC) to the steel and non-ferrous metals industries in India. Through collaboration with Germany's Erhardt+Leimer Group, the company will strengthen its domestic and overseas businesses in control equipment and inspection equipment, aiming to expand its overseas sales ratio.

From FY2027 (ending March 2027), the shareholder return policy will be raised to "consolidated dividend payout ratio of 50% or more and DOE of 3.0% or more." The company will proceed with reviewing and selling cross-shareholdings, and plans a dividend of ¥105 per share for FY2027 (ending March 2027), including a special dividend of ¥3. The aim is to improve capital efficiency and maximize shareholder value.

In the Inspection Equipment Business, which continues to post segment losses, the company aims to achieve profitability by expanding sales of Electrode Inspection Equipment for perovskite solar cells, surface inspection equipment equipped with AI Discrimination-enabled Inspection System, and Food Inspection Equipment, while strengthening collaboration with Oyokoken Kogyo's radiation measurement equipment.

Last updated: July 19, 2026