ENVALITH
日本電計株式会社 logo

NIHON DENKEI CO.,LTD.

9908・Standard Market・Wholesale Trade

Official website
日本電計株式会社 logo
NIHON DENKEI CO.,LTD.9908

Business

Nihon Denkei Co., Ltd. is a specialized electronic measuring instrument trading company founded in 1950, providing sales, repair, and calibration services for electronic measuring instruments, power supply equipment, environmental test equipment, and related products. Domestically, the company and 4 consolidated subsidiaries conduct business operations, while overseas it has local subsidiaries in 11 countries including China, Southeast Asia, Europe, and the United States. Its main customers are in the automotive, electronics, and electrical equipment industries, with primary revenue sources derived from R&D and capital investment demand in EV, ADAS, AI, data centers, GX (green transformation), and defense-related fields. Consolidated net sales for FY2026 (ending March 2026) were ¥133,148 million, with the overseas sales ratio reaching 25.0%. Under its purpose of "Contributing to society through measurement technology" and its vision of "Transformation into a technical trading company," the company is promoting a shift from mere product sales to a system-proposal-based business model.

Business Model

The company sources electronic measuring instruments and related equipment from multiple manufacturers, and generates gross profit by proposing and selling optimal products and systems tailored to customer needs. Repair and calibration services also function as a revenue source, and the gross profit margin for FY2026 (ending March 2026) was secured at 13.87%. Domestic and overseas local subsidiaries operate as independent management units, formulating and executing strategies for each region, forming a structure that accumulates earnings through a global sales network.

Company Strengths

Domestically, the company operates through itself and 4 subsidiaries, while overseas it has 19 consolidated subsidiaries in total, including 4 companies in China and local subsidiaries across 11 countries in Southeast Asia and elsewhere. The company has built out its overseas footprint in stages since the 1990s, and overseas sales for FY2026 (ending March 2026) reached ¥33,254 million (25.0% of consolidated sales). This wide-reaching network underpins the company's ability to respond to diverse regional customer needs.

In FY2026 (ending March 2026), order intake reached ¥144,698 million (up 16.7% year on year), and the order backlog reached ¥44,885 million (up 34.6% year on year). The buildup in the order backlog supports revenue recognition in subsequent periods and functions as a company-specific competitive advantage that enhances the near-term visibility of performance.

ROE for FY2026 (ending March 2026) improved to 11.7% from 10.4% in the prior period, exceeding the medium-term management plan target of 10% or higher. The annual dividend was ¥97 (an increase of ¥10 year on year), with the year-end dividend raised by ¥7 from the initial forecast of ¥47 to ¥54. The company has achieved both an accumulation of retained earnings and proactive shareholder returns.

ENVALITH's Perspective

Net sales for FY2026 (ending March 2026) reached ¥133,148 million (up 9.8% year on year), and operating profit rose to ¥4,972 million (up 4.9% year on year), achieving growth in both revenue and profit. However, the operating profit margin actually declined to 3.7% from 3.9% in the previous period. Selling, general and administrative expenses increased to ¥13,497 million (up 10.7% year on year), outpacing the rate of sales growth, as human capital investments such as wage increases and headcount expansion continue to weigh on margin improvement. While external tailwinds from expanding capital expenditure in the automotive, AI, and defense-related sectors provide support, the structurally low profit margin inherent to the trading company model remains an ongoing challenge.

Cash flow from operating activities for FY2026 (ending March 2026) was an outflow of ¥3,621 million, a significant deterioration from an inflow of ¥251 million in the previous period. The main cause was an increase in trade receivables of ¥4,327 million, which far exceeded the ¥826 million decrease in inventories. Short-term borrowings increased by ¥2,733 million, effectively offsetting the shortfall through financing cash flow, a structure that warrants continued monitoring given the expansion of working capital accompanying sales growth and the resulting cash flow trends. The period-end balance of cash and cash equivalents decreased to ¥7,849 million from ¥9,900 million in the previous period.

The order backlog of ¥44,885 million (up 34.6% year on year) is expected to contribute to sales in the next fiscal period. On the other hand, the consolidated earnings forecast for FY2027 (ending March 2027) projects net sales of ¥136,000 million (up 2.1% year on year) and profit attributable to owners of parent of ¥3,500 million (down 4.1% year on year), indicating a decline in profit. Continued strategic investments related to growth strategy and management foundation reinforcement (human capital investment, system-related investment, etc.) are expected to weigh on profit, and whether this is assessed as a temporary decline in profitability during an investment phase or as a structurally low profit margin will be a key consideration in investment decisions.

Growth Strategy

Ahead of the final year of INNOVATION2030 Ver.2.0, the company is advancing efforts to strengthen system proposals, expand into growth markets, and expand global operations.

In the core business centered on electronic measuring instruments, the company is expanding orders by accurately capturing growth areas such as automotive, AI, and defense. In FY2026 (ending March 2026), orders received totaled ¥144,699 million (up 16.7% year on year), and the order backlog rose to ¥44,885 million (up 34.6% year on year), which is expected to contribute to sales in the next fiscal year.

The company is pursuing a 'transformation into a technical trading company,' shifting from simple sales of measuring instruments to providing higher-value-added system proposals and construction for customers. It aims to expand its business domain into growth areas such as AI, data centers, GX (green transformation), and defense-related fields, with the goal of improving gross profit margin. The gross profit margin in FY2026 (ending March 2026) was 13.9% (14.0% in the previous fiscal year), remaining flat.

Leveraging its network of local sales subsidiaries in 19 countries, including China, Southeast Asia, and Europe and the United States, the company is expanding its business by capturing global supply chain transformation. In FY2026 (ending March 2026), the overseas sales ratio expanded to 25.0% (from 21.3% in the previous fiscal year). While China achieved significant growth of 34.0% year on year, the United States and India struggled, highlighting the issue of regional profitability disparities.

Positioning employees as its greatest asset, the company is actively implementing human capital investments such as wage increases, workforce expansion, and skill development initiatives. It also continues system-related investments, aiming to enhance corporate value over the medium to long term. Selling, general and administrative expenses in FY2026 (ending March 2026) increased to ¥13,497 million (up 10.7% year on year), reflecting the current investment phase. Net income for FY2027 (ending March 2027) is forecast to decline due to continued investment of a similar scale.

Last updated: July 19, 2026