ENVALITH
株式会社ニチリョク logo

NICHIRYOKU CO.,LTD.

7578・Standard Market・Retail Trade

Official website
株式会社ニチリョク logo
NICHIRYOKU CO.,LTD.7578

Business

Nichiryoku Co., Ltd. is a comprehensive senior life support company centered on the Grave Business (Outdoor Cemetery & Ossuary) and the Funeral Business. Since beginning gravestone sales in 1980, the company has developed sales agency operations for multiple cemeteries and ossuaries as well as funeral services, mainly in the Greater Tokyo and Nagoya metropolitan areas. In the Outdoor Cemetery business, the company handles the sale, construction, and cemetery management of graves and gravestones based on business cooperation agreements with religious corporations and other entities. In the Ossuary business, it plans and provides sales agency services for urban-type facilities as a pioneer of automated transport indoor mausoleums. The Funeral Business operates funeral halls under the "Rastel" brand, mainly in Yokohama City, and possesses a rare structure capable of providing consistent memorial services other than crematoria. Its main customers are general consumers with needs related to aging and end-of-life planning ("shukatsu"), and the company promotes the conversion of potential customers into orders through its membership organization, Sakura Aoi Club.

Business Model

There are three pillars of revenue: ① Outdoor Cemetery: purchasing or acting as sales agent for perpetual usage rights from religious organizations, recognizing revenue upon completion of gravestone construction. ② Ossuary: undertaking sales agency for automated transport ossuaries of religious organizations, recognizing commission revenue upon receipt of payment from contract holders. ③ Funeral Business: conducting funerals at the company's own hall "Rastel (Last Hotel)" in Yokohama City, and also selling Buddhist altars and altar fittings. Acquiring pre-need reservations through a membership organization contributes to stabilizing order intake.

Company Strengths

Since opening Japan's first automated transport ossuary, Hongo Ryoen, in 1999, the company has expanded to a total of 7 facilities, including Akasaka Hitotsugi Ryoen and Osu Ryoen. It has earned high acclaim as an urban-style ossuary that combines locations within walking distance of major stations with modern facilities, and is further differentiating itself through proprietary features such as the Digital Signage "Kakeiju".

The company has a structure in place to provide both the Grave Business (Outdoor Cemetery and Ossuary) and the Funeral Business (funeral services and Buddhist altar and ritual goods sales) under a single entity. Its securities report explicitly states that it is a "rare company capable of providing all services other than crematoriums," functioning as a "comprehensive senior life support company" that offers one-stop support from end-of-life planning consultations through post-funeral administrative procedures.

The equity ratio at the end of FY2025 (ending March 2025) remained at a high level of 61.3% (60.2% at the end of the previous fiscal year). Even under the challenging environment in which the company recorded a net loss of ¥271 million for the period, it reduced current liabilities by ¥240 million to ¥22,700 million through measures such as reducing interest-bearing debt. Total liabilities also decreased by ¥321 million year on year to ¥2,890 million.

ENVALITH's Perspective

Revenue for FY2026 (ending March 2026) (restated) was ¥1,725 million (down 22.9% year on year), marking the fifth consecutive year of declining revenue, and representing a scale contraction of over 42% compared to FY2022 (ending March 2022). The operating loss expanded significantly to ¥420 million from ¥101 million in the prior period. While the scale of operations shrank due to the transfer of the Funeral Business, reductions in SG&A expenses have not kept pace, and the heavy burden of fixed costs remains a structural challenge. The FY2027 (ending March 2027) revenue forecast of ¥2,337 million (up 35.5% year on year) anticipates a substantial recovery, but its feasibility warrants careful scrutiny.

The financial results summary published in May 2026 was restated in July 2026, with a re-verification of estimates related to the valuation of leasehold deposits resulting in a correction that improved revenue by ¥15 million and net loss by ¥74 million. Although the direction of the correction was toward improved performance, the fact that a material estimation error came to light after publication draws investor attention to the reliability of the accounting process. The leasehold deposit balance stands at ¥5,106 million (restated), equivalent to approximately 100% of total assets, and the appropriateness of its valuation requires ongoing monitoring.

In FY2026 (ending March 2026) (restated), the company recorded an impairment loss of ¥368 million (extraordinary loss) and a provision for allowance for doubtful accounts of ¥216 million under non-operating expenses. The allowance for doubtful accounts balance reached ¥1,943 million (restated), equivalent to approximately 38% of the ¥5,106 million in leasehold deposits. While the external factor of an increasingly super-aged society supports underlying demand, the deterioration in asset quality and the heavy fixed-cost structure constrain the recovery in profitability, and fundamental reform of the cost structure is essential to achieving the FY2027 (ending March 2027) forecast of a return to profit (operating profit of ¥220 million).

Growth Strategy

Aiming to return to profitability through differentiation via Temple Precinct Cemeteries, Main Hall Funerals, and the Anshin Support Pack Plan, combined with cost structure reform

Leveraging Temple Precinct Cemeteries developed through business alliances with religious corporations (a 31-temple network in the Greater Tokyo area), the company aims to capture demand for grave closures, tree burials, and grave relocations. The Outdoor Cemetery segment barely maintained profitability in FY2026 (ending March 2026), with revenue of ¥556 million and segment profit of ¥4 million; strengthening sales capability through joint development of temple-precinct-type tree burials is key to earnings improvement.

In the funeral business, centered on Yokohama City, the company is promoting differentiation and higher unit prices through the Main Hall Funeral plan. In FY2026 (ending March 2026), the Funeral Business segment recorded revenue of ¥1,025 million and segment profit of ¥139 million, the only one of the three segments to remain profitable, making it a core pillar of earnings as a remaining business following the business transfer.

Against the backdrop of an increasing number of elderly single-person households, the company is rolling out the Nichiryoku Anshin Support Pack Plan, which comprehensively covers end-of-life planning needs. Through the acquisition of pre-need reservations via the Sakura Aoi Club membership organization and the conversion of prospective customers into actual orders, the company aims to build a stable order pipeline.

In FY2026 (ending March 2026), total SG&A expenses reached ¥1,598 million (restated), a ratio of 92.6% against revenue of ¥1,725 million; substantial reduction of fixed costs is essential for returning to profitability. Achieving the projected operating profit of ¥220 million in FY2027 (ending March 2026) requires structural compression of personnel costs, advertising expenses, and other costs in parallel with revenue recovery.

Last updated: July 17, 2026