Kodensha,Co., Ltd. (1948) AI Stock Analysis

• Market Cap: ¥61.83B
• Dividend Yield: 2.01%
• Average Volume (3M): 29.25K
• Price to Earnings (P/E): 21.6
• Beta (1Y): 0.90
• Revenue Growth: 14.48%
• EPS Growth: 122.79%
• Country: JP
• Employees: 687
• Sector: Industrials
• Sector Strength: 72
• Industry: Engineering & Construction
• EPS (TTM): 71.50
• Shares Outstanding: 8,970,000
• 10 Day Avg. Volume: 21,220
• 30 Day Avg. Volume: 29,250
• PEG Ratio: 0.03
• Price to Book (P/B): 0.81
• Price to Sales (P/S): 0.45
• P/FCF Ratio: 17.59
• 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: 76 Outperform
• Price Target: ¥7,113.00 ▲(42.26% Upside)
• Action: Reiterated Date: 01/21/26
• Date: Action: Reiterated 01/21/26

The score is driven primarily by strong financial performance (solid growth and profitability with a very low-leverage balance sheet). Technicals are supportive due to a strong uptrend, but overbought signals (RSI and Stoch) reduce the score. Valuation is reasonable with a moderate P/E and a modest dividend yield.

Positive Factors

Low leverage / strong equity base

Extremely low leverage and a high equity ratio provide durable financial flexibility. This supports capital expenditures, R&D and bidding on long-term contracts without stressing interest coverage, allowing the company to fund growth or absorb cyclical downturns without forced deleveraging.

Consistent revenue growth and improving margins

Sustained double-digit revenue growth alongside rising gross and net margins signals improving operational efficiency and pricing or product mix advantages. This trend supports lasting cash generation, strengthens competitive position, and underpins reinvestment for medium-term expansion.

Large improvement in free cash flow

A substantial increase in free cash flow demonstrates material improvement in cash-generative capacity. Higher FCF enables funding of maintenance capex, selective investment, shareholder returns or debt reduction, increasing the firm's financial optionality over the next several quarters.

Negative Factors

Weak cash conversion and flow volatility

Operating and free cash flow convert less than half of reported earnings, and past volatility is noted. Persistently weak cash conversion reduces the reliability of earnings to support investment, dividends or debt servicing and raises execution risk during slower demand periods.

Rising total debt warrants monitoring

Although leverage is low today, the trend of rising total debt introduces risk if it continues. Growing debt combined with modest cash conversion could erode financial flexibility, increase interest exposure and limit strategic optionality if margins or revenues weaken.

Exposure to cyclical end markets

Revenue tied to manufacturing, construction and telecom makes demand sensitive to economic cycles and capex budgets. Cyclical end-market exposure can cause revenue and order volatility, complicating capacity planning and pressuring margins during economic slowdowns.

Kodensha,Co., Ltd. Business Overview & Revenue Model

Company Description

The Kodensha Co., Ltd. engages in the construction business in Japan. The company constructs power plants and substations; water treatment facilities; highway control monitoring equipment, such as road information boards and surveillance TV cameras; electrical equipment, including building power supply and management equipment; and video equipment for stadium facilities, as well as supplies and installs various night lighting, etc. It also undertakes electrical installation work for factories; instrumentation work for factory production machines; transmission line construction and related civil engineering works; survey and surveying work for power transmission line construction; and maintenance work for transmission lines. In addition, the company engages in design and construction of lighting, light electrical, power, receiving and transforming, power generation and storage equipment, as well as offers central monitoring facilities. Further, it sells FA control equipment/distribution control equipment, air conditioning equipment, low temperature equipment, ventilation equipment, elevator and building equipment, industrial mechatronics equipment, and system solutions. The company was founded in 1910 and is headquartered in Tokyo, Japan. The Kodensha Co., Ltd. operates as a subsidiary of Mitsubishi Electric Corporation.

How the Company Makes Money

Kodensha generates revenue primarily through the sale of its electrical equipment and components to a diverse range of industries, including manufacturing, construction, and telecommunications. The company's revenue model is built on both direct sales and long-term contracts with large corporations, which provide a steady stream of income. Key revenue streams include product sales, maintenance services, and customization solutions tailored to meet specific client needs. Additionally, partnerships with major industrial players and participation in government projects enhance its market presence and contribute to earnings. The company also invests in research and development to innovate and expand its product line, further driving revenue growth.

Kodensha,Co., Ltd. Financial Statement Overview

Summary

Strong income statement performance (12.61% YoY revenue growth, improving profitability with ~20.8% gross margin and ~6.97% net margin) and a very low leverage balance sheet (debt-to-equity 0.02, equity ratio 65.35%) support a high score. Cash flow improved sharply (free cash flow growth 646.67%), but the relatively low cash conversion vs. earnings (operating cash flow to net income 0.41; free cash flow to net income 0.37) and prior volatility temper the score.

Income Statement

Kodensha, Co., Ltd. has shown strong revenue growth of 12.61% year-over-year, with consistent increases in gross and net profit margins, indicating efficient operations. The gross profit margin for the most recent year is 20.8%, while the net profit margin stands at 6.97%. EBIT and EBITDA margins have also improved significantly, reflecting better earnings before interest and taxes. These metrics suggest a robust upward trajectory in profitability and revenue generation.

Balance Sheet

The company's balance sheet reflects a healthy financial structure with a debt-to-equity ratio of 0.02, indicating low leverage and substantial equity backing. The return on equity (ROE) is a strong 12.55%, showing effective utilization of shareholders' equity to generate profits. The equity ratio is 65.35%, suggesting a strong equity position relative to total assets. While the financial stability is commendable, the slight increase in total debt over the years warrants monitoring.

Cash Flow

Cash flow analysis reveals positive momentum, with a free cash flow growth rate of 646.67% from the previous year, driven by substantial improvements in operating cash flow. The operating cash flow to net income ratio is 0.41, and the free cash flow to net income ratio is 0.37, indicating sufficient cash generation relative to profits. However, past volatility in operating cash flows highlights potential risks in cash flow sustainability.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	40.16B	39.26B	34.87B	33.56B	29.16B	32.42B
Gross Profit	8.17B	8.17B	6.12B	5.38B	4.80B	5.81B
EBITDA	3.37B	4.00B	1.53B	1.05B	651.00M	1.42B
Net Income	2.73B	2.74B	899.00M	556.00M	310.00M	885.00M
Balance Sheet
Total Assets	30.47B	33.38B	32.42B	31.58B	28.46B	29.23B
Cash, Cash Equivalents and Short-Term Investments	660.00M	892.00M	1.45B	1.60B	1.59B	1.54B
Total Debt	531.00M	514.00M	572.00M	589.00M	608.00M	738.00M
Total Liabilities	8.95B	11.46B	11.97B	12.86B	9.92B	10.57B
Stockholders Equity	21.39B	21.81B	20.35B	18.63B	18.46B	18.58B
Cash Flow
Free Cash Flow	0.00	1.01B	135.00M	71.00M	-977.00M	2.62B
Operating Cash Flow	0.00	1.12B	190.00M	123.00M	-589.00M	2.85B
Investing Cash Flow	0.00	-249.00M	13.00M	238.00M	986.00M	-2.96B
Financing Cash Flow	0.00	-1.08B	-418.00M	-411.00M	-534.00M	-417.00M

Kodensha,Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 5000.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:1948, the sentiment is Positive. The current price of 5000 is below the 20-day moving average (MA) of 6520.50, below the 50-day MA of 5957.50, and above the 200-day MA of 3428.90, indicating a bullish trend. The MACD of 253.15 indicates Negative momentum. The RSI at 68.24 is Neutral, neither overbought nor oversold. The STOCH value of 93.72 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:1948.

Kodensha,Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
1941	76 Outperform	¥282.69B	16.21	9.20%	2.78%	1.31%	59.20%
1939	76 Outperform	¥101.86B	18.89	―	4.38%	-0.84%	-1.80%
1948	76 Outperform	¥61.83B	21.61	―	2.01%	14.48%	122.79%
1949	74 Outperform	¥345.45B	19.95	12.41%	1.68%	8.09%	20.78%
1959	74 Outperform	¥748.49B	22.29	―	2.15%	-5.20%	-1.20%
1942	72 Outperform	¥1.43T	25.17	14.15%	2.00%	16.43%	53.76%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%