IHI Corporation
7013・Prime Market・Machinery
Business
IHI is a diversified heavy industries group founded in 1889, comprising 127 consolidated subsidiaries and 18 equity-method affiliates. Its business is organized into four segments: "Resources, Energy & Environment," "Social Infrastructure," "Industrial Systems & General-Purpose Machinery," and "Aero Engine, Space & Defense." Major customers span a wide range, including government agencies such as the Ministry of Defense and JAXA, domestic and international airlines and engine manufacturers, power and energy companies, and infrastructure operators. In FY2026 (ending March 2026), revenue totaled ¥1,643,402 million, with the Aero Engine, Space & Defense segment accounting for approximately 40% of the total at ¥651,718 million, driving overall growth. In its "Mid- to Long-Term Direction" toward 2040, the company has clarified its policy of focusing on three domains: Aerospace, Energy, and Infrastructure.
Business Model
IHI manufactures and sells products such as aero engines, power generation equipment, bridges, and turbochargers, while also generating recurring revenue from post-delivery aftermarket activities (lifecycle business), including maintenance, repair, and spare parts supply. In particular, within the Aero Engine, Space & Defense segment, spare parts sales and maintenance for Commercial Aero Engines (Spare Parts & Aftermarket Maintenance) generate high profitability, with the segment profit margin reaching 17.2%. In Resources, Energy & Environment and Industrial Systems & General-Purpose Machinery as well, the company is expanding service revenue by leveraging its installed equipment base.
Company Strengths
Under long-term technology licensing agreements with GE, RTX, and Rolls-Royce, IHI participates in the manufacturing and maintenance of major engines such as the F100, F135, and PW1100G-JM. In FY2026 (ending March 2026), the Aero Engine, Space & Defense segment recorded revenue of ¥651,718 million and segment profit of ¥112,429 million (profit margin of 17.2%), generating the majority of the group's overall profit. The company operates the Tsurugashima Plant (in operation since 2021) as a maintenance base, and construction of a new repair building is also underway.
Under the "Group Management Policies 2023," IHI actively divested low-profitability businesses. In fiscal 2025 (FY2026, ending March 2026), the company completed the transfer of the transport machinery business, IHI General Purpose Boiler, IHI Building Materials Industry, Niigata Transys, Meisei Electric, and others. As a result, the operating profit margin for FY2026 (ending March 2026) reached 10.1% and ROIC reached 11.0%, both achieving the targets set under the "Group Management Policies 2023" (operating profit margin of 7.5% and ROIC of 8% or higher).
In the Social Infrastructure segment, the company holds a top-class domestic share in Bridges & Floodgates, and its technological capabilities have received international recognition, including the Shutoko Daishi Bridge renewal project winning the Outstanding Structure Award at the "IABSE AWARDS 2025." In the nuclear field, leveraging its long experience manufacturing critical reactor components, the company has completed a mock-up of steel modules for SMRs, advancing its readiness for next-generation nuclear power.
ENVALITH's Perspective
Performance Trend
After recording an operating loss of ¥(70,138) million in FY2024 (ending March 2024) due to PW1100G-related losses, the company achieved a V-shaped recovery to ¥143,517 million in FY2025 (ending March 2025). In FY2026 (ending March 2026), operating profit improved further to ¥165,534 million, and net income for the period reached ¥160,992 million, up 42.8% year on year. Revenue remained largely flat at ¥1,643,402 million, but external sales in the Aero Engine, Space & Defense segment expanded to ¥648,135 million (up 17.3% year on year), driving profit growth. External tailwinds included the recovery in commercial air passenger demand and increased defense budgets. On the other hand, segment profit in the Resources, Energy & Environment segment declined sharply to ¥5,959 million from ¥16,136 million in the previous fiscal year, highlighting an increasingly uneven revenue structure.
Growth Strategy
With aero engines and defense as growth drivers, the company is fostering decarbonization technologies as its next pillar while accelerating portfolio reform
Capturing the medium- to long-term expansion in demand for commercial aero engine spare parts sales and maintenance (MRO). The company aims to further expand aftermarket revenue by strengthening parts repair capacity through the new repair building at the Tsurugashima Plant (scheduled to begin operations in FY2026 (ending March 2026)) to meet growing demand.
Against the backdrop of a substantial increase in Japan's defense budget, the company is driving expansion of orders for defense-related products and systems. It is also responding to growth in the space industry market (satellite constellations, etc.) to expand sales and profit across the entire Aero Engine, Space & Defense segment. External sales for this segment in FY2026 (ending March 2026) reached ¥648,135 million, a 17.3% increase year on year.
Promoting the commercialization of decarbonization technologies such as ammonia gas turbines, with the aim of expanding the life-cycle business of Carbon Solutions. Against the backdrop of heightened awareness of energy security, the company will also continue to pursue orders for large-scale power plant projects in emerging markets such as Southeast Asia.
Promoting scale expansion through the transfer of the mechanical parking business from Sumitomo Heavy Industries Transportation System (scheduled to take effect in November 2025), and concentrating management resources on highly profitable businesses. Segment profit for FY2026 (ending March 2026) achieved a significant improvement, reaching ¥30,778 million (+185% year on year).
Promoting stronger profitability management for large-scale projects and reform of the cost structure. Segment profit for FY2026 (ending March 2026) was ¥5,959 million, a significant deterioration from ¥16,136 million in the previous fiscal year, making it urgent to advance project management sophistication and selective order-taking to restore profitability.
Last updated: July 19, 2026