Conservative Capital StructureVery low leverage and a high equity ratio provide lasting financial resilience in a cyclical steel industry. The conservative capital structure reduces bankruptcy risk, preserves borrowing capacity for downturns, and supports funding of maintenance capex or strategic spending without stressing cash flows.

Strong Operating Cash GenerationOperating cash flow exceeding net income indicates high cash quality and earnings convertibility. Persistent cash generation supports dividends, working capital and selective reinvestment, giving management flexibility to fund operations and weather cyclical demand swings without relying on external financing.

Healthy Gross MarginsAn ~18% gross margin signals efficient production and cost control in steel operations. Sustained manufacturing efficiency provides structural margin cushion versus commodity cycles, enabling the company to retain profitability through price or input-cost fluctuations and maintain competitive pricing power.

Bears Say

Declining Revenue TrendFalling top line reduces scale advantages and pressures fixed-cost absorption in a capital-intensive sector. If revenue contraction persists, it can erode operating leverage, restrict reinvestment capacity, and challenge the company’s ability to sustain dividends or finance growth initiatives without margin improvement.

Narrowing Profitability MarginsCompression in net and operating margins indicates rising costs or weaker pricing power. Sustained margin erosion would reduce retained earnings and limit the company’s ability to invest in efficiency or modernization, increasing vulnerability to raw material swings common in steel over the medium term.

Falling Free Cash FlowA significant drop in free cash flow curtails discretionary spend and strategic optionality. Even with positive operating cash conversion, declining FCF weakens capacity for capex, debt reduction or higher dividends, and may force tougher capital-allocation choices during slower demand periods.

7305 FAQ

What was Araya Industrial Co., Ltd.’s price range in the past 12 months?

Araya Industrial Co., Ltd. lowest stock price was ¥3945.00 and its highest was ¥5830.00 in the past 12 months.

What is Araya Industrial Co., Ltd.’s market cap?

Araya Industrial Co., Ltd.’s market cap is ¥22.36B.

When is Araya Industrial Co., Ltd.’s upcoming earnings report date?

Araya Industrial Co., Ltd.’s upcoming earnings report date is May 19, 2026 which is in 88 days.

How were Araya Industrial Co., Ltd.’s earnings last quarter?

Araya Industrial Co., Ltd. released its earnings results on Feb 10, 2026. The company reported ¥111.83 earnings per share for the quarter, beating the consensus estimate of N/A by ¥111.83.

Is Araya Industrial Co., Ltd. overvalued?

According to Wall Street analysts Araya Industrial Co., Ltd.’s price is currently Overvalued. Get more investment ideas with TipRanks Premium

Does Araya Industrial Co., Ltd. pay dividends?

Araya Industrial Co., Ltd. pays a Semiannually dividend of ¥200 which represents an annual dividend yield of 6%. See more information on Araya Industrial Co., Ltd. dividends here

What is Araya Industrial Co., Ltd.’s EPS estimate?

Araya Industrial Co., Ltd.’s EPS estimate for its next earnings report is not yet available.

How many shares outstanding does Araya Industrial Co., Ltd. have?

Araya Industrial Co., Ltd. has 5,200,000 shares outstanding.

What happened to Araya Industrial Co., Ltd.’s price movement after its last earnings report?

Araya Industrial Co., Ltd. reported an EPS of ¥111.83 in its last earnings report, beating expectations of N/A. Following the earnings report the stock price went up 1.473%.

Which hedge fund is a major shareholder of Araya Industrial Co., Ltd.?

Currently, no hedge funds are holding shares in JP:7305

What is the TipRanks Smart Score and how is it calculated?

Smart Score combines eight research factors - such as analyst recommendations, hedge fund trends, and technical indicators - to measure a stock’s outlook. These signals are unified into a single score that reflects bullish or bearish momentum. See detailed methodology

Company Description

Araya Industrial Co., Ltd.

Araya Industrial Co., Ltd. manufactures and sells steel products in Japan and internationally. The company offers ordinary steel pipes, stainless steel pipes, special-shaped steel pipes, various sections, and precision parts for OA machines for use in automobiles, motorcycles, bicycles, construction, furniture products, industrial machinery, welfare equipment, and logistics equipment. It also offers suspensions for wheelchairs, wheel chairs, industrial absolex, and wing arms for toilet, as well as bicycles and rims. The company was founded in 1903 and is headquartered in Osaka, Japan.