Nankai Tatsumura Construction Co., Ltd. (1850) AI Stock Analysis

• Market Cap: ¥14.56B
• Dividend Yield: 1.01%
• Average Volume (3M): 153.75K
• Price to Earnings (P/E): 9.6
• Beta (1Y): 0.66
• Revenue Growth: 17.09%
• EPS Growth: 43.01%
• Country: JP
• Employees: 484
• Sector: Industrials
• Sector Strength: 72
• Industry: Engineering & Construction
• EPS (TTM): 15.68
• Shares Outstanding: 28,835,730
• 10 Day Avg. Volume: 254,800
• 30 Day Avg. Volume: 153,750
• PEG Ratio: 0.10
• Price to Book (P/B): 0.53
• Price to Sales (P/S): 0.17
• P/FCF Ratio: -1.47
• 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: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 66 Neutral
• Price Target: ¥539.00 ▼(-10.32% Downside)
• Action: Downgraded Date: 01/29/26
• Date: Action: Downgraded 01/29/26

The score is driven primarily by solid financial performance (strong revenue trends and a healthy equity base), offset by cash flow volatility and rising leverage risk. Valuation is supportive with a low P/E, while technicals are a headwind due to the stock trading below key short- and mid-term moving averages despite oversold signals.

Positive Factors

Consistent revenue growth

Sustained revenue expansion with stable gross margins indicates durable demand and cost control in core construction operations. Over a 2-6 month horizon this supports predictable top-line cash generation, underpins operating leverage and makes future margin improvement achievable as fixed costs scale.

Healthy equity base

A strong equity ratio provides capital cushion and reduces reliance on short-term financing, improving creditworthiness and resilience through project cycles. Structurally this supports capital allocation for bids or capex without immediate refinancing pressure, bolstering long-term financial stability.

Improving reported earnings

Material EPS growth suggests improving profitability and operational efficiency versus prior periods. If sustained, this enhances internal funding for projects and dividends, reflects effective cost or pricing execution, and can compound shareholder returns over multiple quarters.

Negative Factors

Cash flow volatility

Volatile free cash flow and a recent negative operating cash flow erode the firm's ability to self-fund working capital and capex, increasing dependency on external financing. Over months this raises execution risk on projects and constrains investment optionality until cash generation stabilizes.

Rising leverage

A rising debt-to-equity trend reduces financial flexibility and heightens interest and refinancing risk, especially if cash flows remain uneven. Structurally, higher leverage limits ability to absorb project delays or bid competitively and can pressure credit metrics over the coming quarters.

Moderate net margins

Moderate net margins constrain the company's capacity to convert gross profit into retained earnings and cash. Over time this limits cushion against cyclical downturns, reduces funds available for strategic reinvestment and makes the business more sensitive to cost or pricing shocks.

Nankai Tatsumura Construction Co., Ltd. Business Overview & Revenue Model

Company Description

Nankai Tatsumura Construction Co., Ltd. operates as a construction company in Japan. The company undertakes civil engineering; construction; and pipe, electrical, and telecommunications construction works, as well as general construction works. It also owns and sells real estate properties. The company was founded in 1923 and is headquartered in Osaka, Japan. Nankai Tatsumura Construction Co., Ltd. operates as a subsidiary of Nankai Electric Railway Co., Ltd.

How the Company Makes Money

Nankai Tatsumura Construction Co., Ltd. generates revenue primarily through its construction projects, which include public works contracts, private developments, and large-scale infrastructure projects. The company wins contracts through competitive bidding processes, leveraging its reputation, expertise, and financial stability to secure projects. Key revenue streams include payments for construction services, project management fees, and long-term maintenance contracts. Additionally, the company may engage in partnerships with governmental bodies and private developers, which can lead to joint ventures or collaborative projects that enhance its revenue potential. Factors contributing to its earnings include the demand for construction services in urban development, government investment in infrastructure, and the company’s ability to adapt to market trends and technological advancements in construction methodologies.

Nankai Tatsumura Construction Co., Ltd. Financial Statement Overview

Summary

Income statement strength (score 75) reflects consistent revenue growth and stable gross margins, but only moderate net margins. Balance sheet quality is solid (score 70) with a healthy equity base, though rising leverage is a watch item. Cash flow is the main weakness (score 65) due to volatile free cash flow and a recent negative operating cash flow.

Income Statement

The company has shown consistent revenue growth over the years with a significant jump from the previous year, indicating strong demand and effective management. The gross profit margin has been stable, reflecting efficient cost management. However, the net profit margin hovers around a moderate level, suggesting room for improvement in controlling operational costs or enhancing revenue efficiency.

Balance Sheet

The balance sheet is robust with a healthy equity ratio, indicating a strong position in terms of asset financing through equity rather than debt. However, the increasing debt-to-equity ratio poses a potential risk, especially with the recent increase in total debt. Return on equity is satisfactory, illustrating decent profitability relative to shareholder equity.

Cash Flow

The company faces challenges in cash flow management, highlighted by fluctuations in free cash flow and a recent negative operating cash flow. The operating cash flow to net income ratio reflects inconsistencies, suggesting volatility in cash earnings. Nevertheless, there are signs of recovery in cash flow with strategic management of capital expenditures.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	53.82B	52.95B	43.63B	42.40B	37.19B	44.82B
Gross Profit	5.06B	4.82B	3.79B	4.02B	3.99B	3.88B
EBITDA	2.76B	2.49B	1.78B	1.97B	2.06B	1.85B
Net Income	1.90B	1.71B	1.10B	1.90B	1.31B	693.00M
Balance Sheet
Total Assets	34.44B	43.30B	30.34B	35.14B	32.73B	36.27B
Cash, Cash Equivalents and Short-Term Investments	4.25B	3.93B	6.27B	7.83B	5.42B	4.40B
Total Debt	1.66B	5.98B	1.93B	4.42B	4.46B	5.01B
Total Liabilities	16.90B	26.01B	14.56B	20.68B	20.06B	24.92B
Stockholders Equity	17.54B	17.29B	15.77B	14.45B	12.67B	11.35B
Cash Flow
Free Cash Flow	0.00	-6.29B	1.51B	1.80B	1.57B	2.26B
Operating Cash Flow	0.00	-6.13B	1.52B	1.82B	1.60B	2.28B
Investing Cash Flow	0.00	-137.00M	-507.00M	711.00M	-33.00M	-26.00M
Financing Cash Flow	0.00	3.93B	-2.57B	-125.00M	-551.00M	-1.51B

Nankai Tatsumura Construction Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 601.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:1850, the sentiment is Neutral. The current price of 601 is above the 20-day moving average (MA) of 534.05, above the 50-day MA of 564.56, and above the 200-day MA of 494.80, indicating a neutral trend. The MACD of -13.50 indicates Negative momentum. The RSI at 44.87 is Neutral, neither overbought nor oversold. The STOCH value of 75.92 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for JP:1850.

Nankai Tatsumura Construction Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
1770	76 Outperform	¥15.29B	10.00	―	3.71%	-21.52%	-35.65%
1716	71 Outperform	¥17.35B	8.08	―	2.87%	-1.39%	-4.43%
5918	70 Outperform	¥15.44B	6.90	―	1.39%	2.98%	11.88%
1853	68 Neutral	¥11.04B	9.54	―	4.35%	-7.40%	60.55%
1850	66 Neutral	¥14.56B	9.58	―	1.01%	17.09%	43.01%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
1826	59 Neutral	¥14.66B	11.13	―	5.36%	-3.19%	109.84%