ENVALITH
NCS&A株式会社 logo

NCS&A CO.,LTD.

9709・Standard Market・Information & Communication

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NCS&A株式会社 logo
NCS&A CO.,LTD.9709

Business

NCS&A Co., Ltd. is an independent IT services company founded in 1966, comprising the Company and three consolidated subsidiaries. Guided by its founding spirit of "Computers serve society," the company provides one-stop services spanning system development, maintenance, and operation to address corporate management challenges. Its business is organized into three segments: System Development (contract development and proprietary solutions), Services (hardware maintenance and system support), and Sales of System Equipment. Major customers span a wide range, including major SIers (NEC Corporation accounts for 16.6% of net sales), insurance companies, local governments, and hotel and manufacturing industries. The company is listed on the Standard Market of the Tokyo Stock Exchange and has offices in Osaka, Tokyo, and Nagoya.

Business Model

Revenue is composed of four segments: proprietary product solutions (¥6,835 million), system integration (¥7,996 million), contracted development (¥5,214 million), and equipment/packages (¥2,439 million). The company is promoting a shift toward higher-margin proprietary solutions (such as migration services, The Kyufu, and ReverseNeo) while securing stable revenue through contracted development for major SIers (system integrators). It also aims to build up recurring revenue by transitioning to maintenance services following migration projects.

Company Strengths

The migration service centered on the proprietary visualization technology "ReverseNeo" features unique technology capable of mechanically aggregating and converting entire applications line by line. Through the transformation into a "Migration Center," the number of concurrent projects has increased steadily, and in-house product solution revenue for FY2026 (ending March 2026) reached ¥6,835 million, up ¥1,428 million year on year.

As of the end of FY2026 (ending March 2026), cash and cash equivalents stood at ¥10,999 million, the equity ratio was 64.8%, and interest-bearing debt was nearly zero (cash flow to interest-bearing debt ratio of 0.0x). Operating cash flow increased by ¥763 million year on year to ¥2,976 million, and the interest coverage ratio was an extremely high 14,077.9x, indicating a very strong financial safety position.

The in-house startup program, launched in fiscal 2018, has seen a steady increase in the number of applications, rising from 22 in fiscal 2022 to 28 in fiscal 2023, 33 in fiscal 2024, and 44 in fiscal 2025. Results that have translated from the program into actual product commercialization and business creation continue to emerge, including the incorporation of an ATM receipt function into The Kyufu, enhancement of generative AI functionality in ReverseNeo, and the release of DocHelper.

ENVALITH's Perspective

Operating profit for FY2026 (ending March 2026) was ¥2,714 million (up 36.1% year on year), with operating margin improving significantly to 12.1% (from 9.7% in the prior period). This reflected the success of the company's focus on proprietary product solutions and concentration on high-margin projects. Meanwhile, net income attributable to owners of parent was ¥2,067 million (down 2.0% year on year), a slight decline, but this was due to a reversal of the one-time effect from income tax adjustment gains (¥812 million) related to deferred tax asset recognition in the prior period. On an underlying basis, earnings capacity has actually improved.

The company's forecast for FY2027 (ending March 2027) calls for revenue of ¥20,500 million (down 8.8% year on year) and operating profit of ¥2,620 million (down 3.5% year on year), representing a decline in both revenue and profit. The forecast explicitly cites procurement difficulties for servers and PC equipment due to memory shortages and price surges driven by expanding AI market demand, as a factor slowing equipment sales. This external factor raises concerns about its impact on business performance. However, the operating margin is projected at 12.8%, which would exceed the final-year target of the medium-term management plan, suggesting that the underlying trend of improving earnings structure will be maintained.

Dependence on orders from major SIers in contracted development (NEC's share of sales stood at 14.2% based on existing analysis) remains a structural risk. In addition, equipment and package sales are directly susceptible to memory shortages, and supply constraints are expected to persist beyond FY2027 (ending March 2027). On the other hand, the company's own initiatives to improve profitability are progressing, including expanding alliances for "The Kyufu" targeted at local governments and concentrating contracted development efforts in areas of strength, confirming a trend toward reduced dependence.

Growth Strategy

Advancing the sophistication of the revenue structure through strengthening proprietary solutions, utilizing generative AI, and investing in human capital

Consolidation of common tasks has expanded the number of concurrent projects. The company has also launched a system maintenance business following migration, aiming to build up recurring revenue. Large-scale projects for insurance companies are progressing steadily, with proprietary solutions sales expanding by +¥1,428 million year on year.

Through the "in-house startup program," the company released a new version of "ReverseNeo" (April 2025) and "DocHelper" (February 2026), both incorporating generative AI technology. The company is also promoting talent development and building an internal AI environment toward the utilization of AI agents.

"The Kyufu" (benefit payment system for local governments) has seen an increase in the number of adopting municipalities through expanded collaboration with alliance partners. Since January 2026, the company has integrated functionality with Seven Payment Service's "ATM receipt" feature, strengthening the service's competitiveness.

The company implemented an average 5% increase in salary levels from June 2025 (the second consecutive year of increases following the previous fiscal year). In October 2025, a special allowance to offset rising prices was paid to all employees. The company has expanded childcare and caregiving support programs and introduced femtech services, among other measures to create an environment where diverse talent can thrive. Certified as an Excellent Health Management Corporation 2026 (Kenko Keiei Yuryo Hojin 2026).

With a target consolidated dividend payout ratio of 45% or higher, the company achieved an annual dividend of ¥58 for FY2026 (ending March 2026) (a substantial increase from ¥40 in the previous fiscal year), resulting in a payout ratio of 43.8%. Share buybacks have been conducted since August 2025 (¥1,499 million acquired during the fiscal year). An annual dividend of ¥58 is also planned for FY2027 (ending March 2027).

Last updated: July 19, 2026