ENVALITH
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INES Corporation

9742・Prime Market・Information & Communication

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株式会社アイネス logo
INES Corporation9742

Business

Ines Corporation was founded in 1964 and is listed on the Prime Market of the Tokyo Stock Exchange as an IT services company. The Group consists of parent company Ines and four subsidiaries, providing an integrated range of information processing and communication services, software development, and system provision, operation and maintenance. Its main customers are the public sector, primarily local governments (46.6% of sales composition), and private companies (53.4%). The company's core solution is "WebRings," an administrative system for local governments, with a long track record in the welfare and resident information fields. Through a business and capital alliance with Mitsubishi Research Institute, the company is also promoting joint order acquisition and solution development for both the public and private sectors.

Business Model

Revenue composition consists of system development 45.6%, operations 34.6%, system maintenance 13.7%, information equipment sales 1.8%, and other 4.3% (FY2026, ending March 2026). The business structure builds a customer base through contracted development, then generates recurring revenue from operations and maintenance after systems go live. Combined operations and maintenance account for approximately 48% of net sales, forming a stable stream of recurring (stock-type) revenue. Following completion of standardization for the municipal package "WebRings," the company aims to improve profit margins by shifting toward a package-based business model.

Company Strengths

Since 1968, the company has been engaged in the development of resident information systems for local governments, building a track record of over 50 years. Its flagship solution, "WebRings," has completed development of a version compliant with national standards, with sequential rollout to local governments beginning in January 2026. Public sector revenue reached ¥17,077 million in FY2026 (ending March 2026), accounting for 46.6% of total revenue, forming a robust customer base.

In FY2026 (ending March 2026), operations revenue was ¥12,685 million (up 0.1% year on year) and system maintenance revenue was ¥5,014 million (up 1.7% year on year), showing stable trends in operations and maintenance even as system development revenue declined significantly. Together, these two categories account for approximately 48% of total revenue, forming a recurring revenue base that is relatively resilient to economic fluctuations.

In June 2018, the company entered into a business and capital alliance with Mitsubishi Research Institute. As a major shareholder and other affiliated company of Ines, Mitsubishi Research Institute engages in joint development of new solutions and joint order-taking activities across both public and private sectors. Collaboration with its think-tank capabilities enables participation in large-scale projects that would be difficult to pursue independently, as well as high-value-added proposals.

ENVALITH's Perspective

In FY2026 (ending March 2026), a decline in revenue recognition due to delays and plan changes related to standardization of municipal government systems, deterioration in the cost ratio, recording of a provision for loss on order backlog of ¥488 million, and further an impairment loss of ¥1,104 million from the unrecoverable standardization-related development investments combined to result in a significant swing to losses, with an operating loss of ¥647 million and a net loss of ¥1,843 million. For FY2027 (ending March 2027), a sharp recovery to net sales of ¥40,000 million (up 9.2% year on year) and operating profit of ¥2,500 million is forecast, but the risk of further plan changes remains depending on the progress of the standardization transition.

In the private sector, in addition to the rebound decline from large-scale system development projects in the previous period, partial withdrawal from the outsourcing business at group companies caused net sales in FY2026 (ending March 2026) to fall to ¥19,538 million (down 5.6% year on year). Sales of information equipment also fell sharply, down 41.2%. As dependence on the public sector increases, the impact of delay risk in municipal standardization efforts on overall performance has grown larger, and creating new growth drivers in the private sector has emerged as a medium-term challenge.

The equity ratio at the end of FY2026 (ending March 2026) remained at a high level of 74.9% (69.1% in the previous period), and cash and cash equivalents were also ample at ¥8,273 million. Short-term borrowings of ¥3,000 million were fully repaid, improving the financial position. On the other hand, ROE fell from 6.3% in the previous period to negative 4.8%. Despite a net loss of ¥1,843 million, the annual dividend of ¥50 (¥1,040 million) was maintained, and a dividend increase to ¥55 is forecast for FY2027 (ending March 2027); however, the payout ratio cannot be calculated due to the net loss, and it is necessary to assess the sustainability of continuing dividends through the drawdown of retained earnings.

Growth Strategy

Aiming for a recovery in the first year of the 2028 Medium-Term Management Plan through three strategies: municipal standardization, next-generation WebRings, and AI solutions

From January 2026, the national-standard-compliant version of WebRings began to be rolled out sequentially to municipalities. Building on the track record of full system operation in FY2025, the company will continue to prioritize quality in providing safe and reliable systems for the standardization migration plan from FY2026 onward. Expanding orders in anticipation of the standardization system migration by designated migration support organizations is the main driver of the earnings recovery expected in FY2027 (ending March 2027).

Development of the next-generation version of the municipal administrative system "WebRings" is being ramped up in earnest. The company is accelerating R&D and implementation of AI agent functionality, aiming to provide a high-value-added, next-generation solution that drives municipal DX (digital transformation) by achieving advanced automation of administrative operations. A development environment leveraging generative AI to enable high-quality, short-lead-time implementation is also being built.

Starting from FY2027 (ending March 2027), the first year of the "2028 Medium-Term Management Plan," the company will advance three business strategies: the "Regional Social Issue Resolution Model," the "Municipal Package Strategy," and the "Solution Business Strategy." It aims to create new businesses that leverage the respective strengths of municipalities and the private sector, and to strengthen its customer base by utilizing solutions from alliance partners.

The company revised its HR system to center on evaluation of engineers' expertise, with implementation beginning in April 2025. It is building a human resources base that promotes the active contribution of personnel across all age groups and supports the creation of new growth drivers, such as investment in solution development and the advancement of business strategy. In parallel, it is also working to reduce security risk through the enhancement of its internal IT infrastructure.

Last updated: July 19, 2026