ARAYA INDUSTRIAL CO., LTD.
7305・Standard Market・Iron & Steel
Business
Araya Industrial Co., Ltd. is a long-established manufacturer founded in 1903, whose core business is the Steel Pipe Related segment, which manufactures and sells Ordinary Steel Pipe, Stainless Steel Pipe, and Various Section Steel & Precision Machined Products. Steel Pipe Related accounts for approximately 97.9% of consolidated net sales. Domestically, the company operates multiple sites including the Chiba Plant, Kansai Plant, and Nagoya Plant, with consolidated subsidiaries such as Daiei Steel Industry, Araya Special Metals, and Stainless Pipe Kogyo handling manufacturing and sales on a group-wide integrated basis. Overseas, the Indonesian local subsidiary PT. Araya Steel Tube Indonesia conducts manufacturing and sales. In addition, the Real Estate Leasing, etc. segment, which leases land and buildings at multiple locations including Ota-ku, Tokyo and Osaka City, Osaka Prefecture, functions as a stable, high-margin source of income. Following the withdrawal from the Complete Bicycles (Import & Sales) business in December 2025, the company's business structure has continued to consolidate around steel pipe and real estate operations.
Business Model
In the core Steel Pipe Related segment, the company combines in-house manufacturing (production volume of ¥23,924 million) with merchandise procurement (¥14,167 million), supplying a diverse range of customers—including automotive, construction, food, medical, and shipbuilding—through the sales networks of group companies. In Real Estate Leasing, etc., former factory sites and similar properties are leased long-term under fixed-term land leases for business use, achieving extremely high profitability with net sales of ¥692 million and an operating margin of 87.1% in FY2026 (ending March 2026). By combining the variable earnings of the steel pipe business with the stable earnings from real estate, the company secures resilience in earnings against market fluctuations.
Company Strengths
The company operates the Chiba, Kansai, and Nagoya plants domestically, with consolidated subsidiaries such as Daiei Kogyo, Araya Special Metals, Stainless Pipe Kogyo, and Miyake Kinzoku functioning together from manufacturing to sales. In FY2026 (ending March 2026), the company made Miyake Kinzoku a consolidated subsidiary, strengthening manufacturing-sales collaboration in the stainless steel and metal filter fields, continuing to expand the group.
The company secures stable revenue through long-term leasing contracts at multiple sites, including the former Tokyo plant site in Ota-ku, Tokyo (a 20-year fixed-term business land lease with Kohnan Shoji) and the former rim plant site at the Kansai plant (a 49-year and 11-month fixed-term land lease with Daiwa House Industry). In FY2026 (ending March 2026), the Real Estate Leasing, etc. segment achieved net sales of ¥692 million, operating income of ¥603 million, and an operating margin of 87.1%.
As of the end of FY2026 (ending March 2026), the equity ratio stood at 57.8% and the interest coverage ratio at 39.9x, indicating a solid financial base. Operating cash flow increased to ¥3,402 million from ¥2,733 million in the previous year, and cash and deposits reached ¥8,801 million. Interest-bearing debt is also kept at roughly 2.3 times operating cash flow, giving the company sufficient financial flexibility to address both capital expenditure and shareholder returns.
ENVALITH's Perspective
Performance Trend
Revenue peaked at ¥46,426 million in FY2023 (ended March 2023) and has declined for three consecutive fiscal years, reaching ¥40,447 million in FY2026 (ending March 2026). The main drivers were deteriorating domestic market conditions due to inflows of inexpensive overseas materials, sluggish construction demand, and falling sales prices. On the other hand, gross margin improved (¥7,717 million → ¥8,317 million) as a result of reviewing unprofitable business segments, and operating profit reached ¥1,885 million, up 14.9% year on year. However, due to the disappearance of the prior year's extraordinary gain (gain on sale of investment securities of ¥1,014 million), net income attributable to owners of the parent fell 28.5% year on year to ¥1,521 million. Comprehensive income increased significantly to ¥4,785 million, driven by a ¥2,766 million increase in valuation gains on investment securities. For FY2027 (ending March 2027), the company forecasts revenue of ¥42,000 million and operating profit of ¥2,400 million.
Growth Strategy
Realizing Long-Term Vision 2033 through strengthening the steel pipe earnings base, ASEAN expansion, M&A, and specialization of the real estate business
The company is advancing the restructuring of its production system and reviewing profitability, improving its operating margin in FY2026 (ending March 2026) even amid declining sales. In FY2027 (ending March 2026), the company aims to achieve operating profit of ¥2,400 million (up 27.3% year on year) through sales price revisions reflecting market trends, productivity improvements, and reviews of materials procurement.
In FY2026 (ending March 2026), the company acquired all shares of Miyake Kinzoku Co., Ltd., making it a consolidated subsidiary. Goodwill of ¥164 million arose in the Steel Pipe Related segment. The company aims to strengthen group competitiveness through the acquisition of new technologies and sales channels. It plans to continue gathering information on and considering further M&A candidates.
As part of the growth strategy under the Medium-Term Management Plan 2026, the company is promoting sales channel expansion into the ASEAN market centered on its Indonesian local subsidiary, aiming to establish overseas revenue sources to offset the deterioration of the domestic market. At present, the contribution to consolidated results remains limited.
Under the Medium-Term Management Plan 2026, the company established a dedicated real estate department to improve the profitability and asset efficiency of its leased properties. In FY2026 (ending March 2026), operating profit in the Real Estate Leasing, etc. segment expanded by 14.6% year on year to ¥603 million, driven by rent increases and other measures.
The company withdrew from the complete bicycle sales business at the end of December 2025. Operating losses in the Bicycle Related segment for FY2026 (ending March 2026) narrowed to ¥17 million (compared with a loss of ¥301 million in the previous year). With after-sales service costs declining, the loss burden is expected to be resolved going forward.
Last updated: July 19, 2026