Totetsu Kogyo Co., Ltd. (1835) AI Stock Analysis

• Market Cap: ¥200.36B
• Dividend Yield: 3.44%
• Average Volume (3M): 51.17K
• Price to Earnings (P/E): 15.5
• Beta (1Y): 0.56
• Revenue Growth: 11.25%
• EPS Growth: 36.92%
• Country: JP
• Employees: 1,853
• Sector: Industrials
• Sector Strength: 72
• Industry: Engineering & Construction
• EPS (TTM): 110.07
• Shares Outstanding: 36,100,000
• 10 Day Avg. Volume: 50,500
• 30 Day Avg. Volume: 51,166
• PEG Ratio: 0.23
• Price to Book (P/B): 0.88
• Price to Sales (P/S): 0.66
• P/FCF Ratio: 42.38
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: ¥5,410.00
• Price Target Upside: 19.03% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2
• EPS Forecast (FY): 377.03
• Revenue Forecast (FY): ¥166.17B

• Rating: 76 Outperform
• Price Target: ¥6,577.00 ▲(44.71% Upside)
• Action: Reiterated Date: 02/11/26
• Date: Action: Reiterated 02/11/26

The score is primarily driven by strong financial performance (rising profitability and a solid balance sheet), tempered by historical cash flow volatility. Technicals add a moderately positive backdrop with longer-term trend support but neutral near-term momentum. Valuation is supportive with a moderate P/E and ~3% dividend yield.

Positive Factors

Improving profitability

Sustained margin expansion and consistent revenue growth from 2022–2025 indicate durable operational improvements and pricing or cost-control advantages in track and civil works. Higher gross and net margins support reinvestment, cover cyclical downturns, and underpin longer-term earnings quality.

Strong capitalization

A high and improving equity ratio with low absolute leverage provides balance-sheet resilience for bidding on multi-year contracts and absorbing project timing swings. Strong capitalization enhances financial flexibility to invest in equipment and sustain dividend or capex programs over the medium term.

Improving free cash flow conversion

Rising free cash flow and better conversion of net income into FCF point to improved working-capital and project-cash management. Durable FCF supports debt servicing, maintenance capex and shareholder returns, and reduces reliance on external financing across construction cycles.

Negative Factors

Operating cash flow volatility

Material swings in operating cash flow reflect project-timing, retainage and working-capital volatility common in construction. Such variability can strain liquidity when large contracts overlap or payments delay, forcing short-term financing and raising execution risk for multi-year projects.

Revenue mix & contract cyclicality

Dependence on recurring maintenance versus project-based work and customers' capex cycles creates structural revenue visibility limits. Demand tied to railway operators' investment schedules makes top-line and backlog sensitive to government/regional spending shifts and long lead-time project awarding.

Rising but low leverage

Although leverage is low, the uptick in debt-to-equity signals increased reliance on borrowed funds to support growth or working capital. If cash-flow volatility recurs, even modest leverage growth could restrict bidding flexibility and raise financing costs during tighter credit conditions.

Totetsu Kogyo Co., Ltd. Business Overview & Revenue Model

Company Description

Totetsu Kogyo Co., Ltd. engages in the railway track maintenance, civil engineering, architectural, and environmental businesses in Japan. The company is involved in the repair and reconstruction of railway tracks, as well as building new railway tracks for the Tohoku Shinkansen, and other public and private sectors. It also engages in the construction, renovation, and reinforcement of elevated and standard bridges, tunnels, motorways, and multilevel crossings, as well as setting up railway platform edge doors for passenger protection. In addition, the company is involved in the construction and maintenance of station buildings for railway lines, apartment houses, office buildings, hotels, shops, schools, etc. Further, it provides environmental technology and services, such as constructing solar power generation systems, greening of buildings, draining disposal systems, removing asbestos, implementing energy conservation systems for air conditioning, etc. The company was founded in 1943 and is headquartered in Tokyo, Japan.

How the Company Makes Money

Totetsu Kogyo generates revenue through several key streams, primarily by manufacturing and selling steel products, including rolled steel, bars, and specialty alloys. The company benefits from long-term contracts with major industrial clients, which provide a steady income base. Additionally, Totetsu Kogyo engages in partnerships with various construction and automotive firms, allowing for collaborative projects that enhance product visibility and market reach. The firm also focuses on research and development to innovate new materials, which can command higher prices and open new market opportunities, further contributing to its earnings.

Totetsu Kogyo Co., Ltd. Financial Statement Overview

Summary

Strong income statement trends with improving gross/net margins and solid revenue growth, supported by a well-capitalized balance sheet. The main offset is cash flow volatility (notably the 2023 operating cash flow drop), despite improved free cash flow by 2025.

Income Statement

The income statement reflects strong profitability with a consistent increase in total revenue from 2022 to 2025. Gross profit margins improved from 12.9% in 2022 to 15.4% in 2025, while net profit margins rose from 4.6% to 7.2%. The firm demonstrated robust revenue growth, particularly from 2024 to 2025, showing a 12.8% increase. EBIT and EBITDA margins also showed positive trends over the years, indicating effective cost management and operational efficiency.

Balance Sheet

The balance sheet shows a solid financial position with increasing stockholders' equity over the period. The equity ratio improved, reaching 66.0% in 2025, reflecting strong capitalization. However, the debt-to-equity ratio slightly increased to 0.088, indicating a rise in leverage, though it remains manageable. Return on equity improved significantly from 2022 to 2025, indicating better profitability relative to equity.

Cash Flow

The cash flow statement reveals fluctuations, with operating cash flow showing a significant drop in 2023 but recovering in 2024 and 2025. Free cash flow improved to 2482.048 million in 2025, suggesting better cash generation. The free cash flow to net income ratio improved, indicating enhanced conversion of net income into free cash flow. However, the operating cash flow to net income ratio was weaker, showing volatility in cash flow management.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	163.07B	160.05B	141.85B	124.66B	114.72B	132.92B
Gross Profit	25.80B	24.67B	20.16B	17.39B	14.78B	21.73B
EBITDA	18.94B	19.40B	14.97B	13.83B	9.77B	15.75B
Net Income	11.87B	11.56B	8.30B	7.91B	5.33B	9.69B
Balance Sheet
Total Assets	155.41B	181.12B	168.12B	149.70B	136.67B	141.70B
Cash, Cash Equivalents and Short-Term Investments	32.56B	15.71B	16.38B	13.61B	25.79B	31.69B
Total Debt	3.43B	10.54B	10.66B	5.76B	866.34M	976.27M
Total Liabilities	35.11B	60.34B	56.63B	46.21B	38.14B	44.95B
Stockholders Equity	119.10B	119.62B	110.43B	102.38B	97.13B	95.42B
Cash Flow
Free Cash Flow	0.00	2.48B	921.59M	-14.50B	-3.28B	16.37B
Operating Cash Flow	0.00	4.16B	4.84B	-8.96B	3.09B	21.12B
Investing Cash Flow	0.00	-1.25B	-3.68B	-4.96B	-5.83B	-3.66B
Financing Cash Flow	0.00	-3.58B	1.61B	1.75B	-3.17B	-3.24B

Totetsu Kogyo Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 4545.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:1835, the sentiment is Positive. The current price of 4545 is below the 20-day moving average (MA) of 5016.25, below the 50-day MA of 4812.70, and above the 200-day MA of 4269.82, indicating a bullish trend. The MACD of 188.33 indicates Negative momentum. The RSI at 81.62 is Negative, neither overbought nor oversold. The STOCH value of 92.66 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:1835.

Totetsu Kogyo Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
1946	77 Outperform	¥230.14B	14.23	―	3.09%	3.75%	87.00%
1835	76 Outperform	¥200.36B	15.51	―	3.44%	11.25%	36.92%
1941	76 Outperform	¥282.69B	16.21	9.20%	2.78%	1.31%	59.20%
1820	75 Outperform	¥271.20B	13.76	―	3.82%	-3.72%	59.02%
1959	74 Outperform	¥748.49B	22.29	―	2.15%	-5.20%	-1.20%
1934	68 Neutral	¥221.53B	16.91	―	2.87%	6.66%	46.38%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%

Totetsu Kogyo Co., Ltd. Corporate Events

Totetsu Kogyo Ups Earnings Outlook and Hikes Dividend Under Capital-Efficient Strategy

Totetsu Kogyo has raised its full-year forecast for the fiscal year ending March 31, 2026, citing steady progress on a large backlog of projects and improved profitability from productivity gains and mechanization. The company now expects higher net sales and double-digit percentage increases in operating, ordinary, and net profit compared with its previous guidance and last year’s results, signaling stronger operating momentum.

In tandem with the upgraded outlook, Totetsu Kogyo has also lifted its dividend forecast, raising the planned year-end payout by 10 yen to 80 yen per share, for an annual total of 150 yen. The move reflects its capital policy under the “Action Plan 2029” medium-term strategy, emphasizing a DOE of at least 3% and a progressive dividend approach, and indicates a more proactive stance on shareholder returns aligned with improving earnings power.

The most recent analyst rating on (JP:1835) stock is a Hold with a Yen5223.00 price target. To see the full list of analyst forecasts on Totetsu Kogyo Co., Ltd. stock, see the JP:1835 Stock Forecast page.

Totetsu Kogyo Delivers Strong Nine-Month Earnings and Confirms Full-Year Outlook

Totetsu Kogyo reported consolidated net sales of ¥106.4 billion for the nine months ended December 31, 2025, a 3.0% year-on-year increase, with operating profit surging 25.1% to ¥11.6 billion and profit attributable to owners of parent rising 19.7% to ¥8.3 billion. The company’s equity-to-asset ratio improved to 70.0% from 66.0% at the previous fiscal year-end, reflecting a stronger balance sheet and higher equity, while basic earnings per share climbed to ¥240.

The group maintained its full-year forecast for the fiscal year ending March 31, 2026, targeting ¥165.0 billion in net sales and ¥12.0 billion in profit attributable to owners of parent, implying modest single-digit growth. Dividend guidance was also kept unchanged, with a planned total annual dividend of ¥140 per share, signaling management’s confidence in earnings stability and a continued commitment to shareholder returns.

The most recent analyst rating on (JP:1835) stock is a Buy with a Yen5517.00 price target. To see the full list of analyst forecasts on Totetsu Kogyo Co., Ltd. stock, see the JP:1835 Stock Forecast page.