Mitsubishi Heavy Industries, Ltd.
7011・Prime Market・Machinery
Business
Mitsubishi Heavy Industries, founded in 1884, is one of Japan's largest comprehensive heavy industries groups. Its core operations comprise four segments: Energy (GTCC System (Gas Turbine Combined Cycle), Nuclear Power Systems, Aircraft Engines), Plants & Infrastructure (Steel Manufacturing Machinery, Commercial Ships, Engineering), Logistics, Thermal & Drive Systems (Thermal Products, Engines & Turbochargers), and Aircraft, Defense & Space (Defense Aircraft & Missiles, Naval Vessels, Special Machinery (Torpedoes) & Special Vehicles, Space Equipment), while also expanding into growth areas such as data center-related businesses. Major customers range from the Ministry of Defense (20.2% of revenue) to domestic and overseas power utilities, government agencies, and industrial customers. Revenue for FY2026 (ending March 2026) reached a record high of ¥4,974,168 million.
Business Model
A vertically integrated business model that provides design, manufacturing, installation, and maintenance services in an integrated manner. The company receives orders for large, long-term projects such as GTCC systems, defense equipment, and naval vessels, and recognizes revenue according to construction progress. The order backlog has accumulated to ¥13,237,688 million (up 29.3% year-on-year), providing high visibility into medium-term revenue. A notable feature of the structure is that contract liabilities recorded at the time of order receipt boost operating cash flow; operating cash flow for FY2026 (ending March 2026) reached ¥942,619 million.
Company Strengths
FY2026 (ending March 2026) order backlog reached ¥13,237,688 million (+29.3% year-on-year), with the Energy segment alone contributing ¥6,983,230 million (+42.0%) and Aircraft, Defense & Space contributing ¥4,063,214 million (+15.6%). As the backlog is centered on large-scale, long-term projects, revenue visibility spans multiple years, underpinning the stability of business performance.
Revenue from the Ministry of Defense reached ¥1,006,022 million (20.2% of total), a significant increase from ¥704,181 million in the prior period. The company holds a unique position as Japan's only comprehensive defense manufacturer capable of designing and manufacturing missiles, defense aircraft, naval vessels, and space equipment in-house. In the Energy field as well, its technological foundation spanning GTCC, nuclear power, and aircraft engines simultaneously represents a distinctive advantage that competitors find difficult to replicate in a short period.
Research and development expenses for FY2026 (ending March 2026) totaled ¥289,078 million (of which ¥208,911 million was commissioned research, etc.). The Aircraft, Defense & Space segment alone invested ¥185,418 million, continuing advanced development of next-generation GTCC, the innovative light-water reactor "SRZ-1200," the H3 rocket, and composite material structural technology, among others. Years of accumulated technology and continuous investment serve as the source of product competitiveness.
ENVALITH's Perspective
Performance Trend
Revenue increased by +28.8% over five years, from ¥3,860,283 million in FY2022 to ¥4,974,168 million in FY2026. However, FY2026 growth was +14.1% year-on-year, partly due to the exclusion impact of discontinued operations (Mitsubishi Logisnext). Net income attributable to owners of the parent expanded roughly 2.9-fold, from ¥113,541 million in FY2022 to ¥332,129 million in FY2026, marking a new record high. Business profit margin improved to 8.7% (from 8.1% in the previous period). External factors—such as increased demand for data center power driven by the expansion of AI-related investment, expanded defense budgets, and energy transition demand—boosted performance. Operating CF increased by approximately 78% year-on-year to ¥942,619 million, and the increase in contract liabilities (¥663,533 million) reflects the strength of advance orders.
Growth Strategy
Advancing both capacity expansion in growth businesses and commercialization of new growth areas as twin pillars; revenue and profit growth are expected to continue in FY2027 (ending March 2027)
Orders have been accumulating centered on GTCC, nuclear power, and aircraft engines, with revenue for FY2027 (ending March 2027) projected at ¥2,200,000 million for the Energy segment alone (up 7.1% year-on-year from FY2026). Growing power demand from data centers and decarbonization needs are functioning as external tailwinds.
Orders for missiles, defense aircraft, and naval vessels have surged against the backdrop of the expanded defense buildup program. Revenue for this segment in FY2027 (ending March 2027) is projected at ¥1,500,000 million (up 7.6% year-on-year from FY2026). A cross-organizational task force is driving improvements in production efficiency, supplier support, and preparations for increased production.
A definitive agreement was signed on September 30, 2025, with procedures completed on May 1, 2026. This achieves concentration of management resources on core businesses (energy, defense, infrastructure) and aims to improve profitability of continuing operations. The impact on the following consolidated fiscal year's results has been disclosed as minor.
Growth areas such as the data center and energy management business have been consolidated within the Others segment, with upfront investment continuing. Business profit for FY2026 was negative at ¥(26,810) million, but the segment aims to innovate customer value chains by providing integrated solutions for power, cooling, and control. Capital expenditure for FY2027 (ending March 2027) is planned at ¥210,000 million.
Last updated: July 19, 2026