Nippon Kayaku Co (4272) AI Stock Analysis

• Market Cap: ¥313.28B
• Dividend Yield: 3.97%
• Average Volume (3M): 383.85K
• Price to Earnings (P/E): 14.5
• Beta (1Y): 0.42
• Revenue Growth: 6.60%
• EPS Growth: 503.36%
• Country: JP
• Employees: 5,902
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Chemicals
• EPS (TTM): 37.32
• Shares Outstanding: 160,000,000
• 10 Day Avg. Volume: 382,940
• 30 Day Avg. Volume: 383,850
• PEG Ratio: -0.73
• Price to Book (P/B): 0.80
• Price to Sales (P/S): 1.07
• P/FCF Ratio: 29.16
• 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): 139.95
• Revenue Forecast (FY): ¥239.75B

• Rating: 73 Outperform
• Price Target: ¥2,214.00 ▲(31.82% Upside)
• Action: Reiterated Date: 11/28/25
• Date: Action: Reiterated 11/28/25

Nippon Kayaku Co's stock is supported by strong financial performance and attractive valuation, with a reasonable P/E ratio and high dividend yield. However, technical indicators suggest the stock is currently overbought, which could lead to short-term volatility. The absence of earnings call data and corporate events does not impact the score significantly.

Positive Factors

Revenue Growth Trend

A double-digit revenue rise year-over-year indicates durable demand across Nippon Kayaku's diversified segments. Persistent top-line growth supports scale economics, underpins margin resilience, and provides a platform for reinvestment and product development over the next several quarters.

Margin Strength and Improvement

Robust gross and improved net margins signal pricing power and effective cost control across businesses. Sustained margin levels enhance cash generation potential, support dividend capacity and fund strategic initiatives, making profitability less vulnerable to short-term revenue swings.

Balance Sheet Resilience

Very high equity ratio and low leverage give the company financial flexibility to weather cycles, fund capex or M&A, and maintain dividends without stressing solvency. Strong capital structure is a durable competitive advantage in capital-intensive chemical and pharma markets.

Negative Factors

Negative Free Cash Flow

A negative free cash flow outturn suggests capital spending or working-capital demands exceeded operating cash generation. Over multiple quarters this can erode liquidity, force higher borrowing or constrain strategic investment, making cash conversion a key medium-term risk.

Weak Cash Conversion

Profitability that does not convert into free cash reduces financial flexibility despite accounting gains. Persistent negative cash-to-income ratios limit the firm's ability to self-fund growth, increase reliance on external financing, and may pressure capital allocation choices over the next 2-6 months.

Decline in Stockholders' Equity

A decline in shareholders' equity reduces the company's capital buffer and could reflect non-recurring losses, dividends above retained earnings, or other adjustments. Diminished equity weakens balance-sheet cushioning and can limit strategic options in adverse industry cycles.

Nippon Kayaku Co Business Overview & Revenue Model

Company Description

Nippon Kayaku Co., Ltd., together with its subsidiaries, develops, manufactures, and sells functional chemicals, pharmaceuticals, safety systems, and agrochemicals and other products in Japan and internationally. The company's Functional and Chemical Business segment offers functional materials, such as epoxy resins, UV-curable resins, sealants for LCD and LED, maleimide resins, photoresists and insulating materials for micro electromechanical systems, and cleaning agents and chemicals. This segment also provides color materials, including inkjet colorants, dyes for textiles and papers, and materials for thermal paper; catalysts for the production of acrylic and methacrylic acid; and polarizing films, inorganic polarizers, liquid crystal display components and projector parts, and components for x-ray analysis. Its Pharmaceuticals Business segment offers anti-cancer and cancer-related drugs, biosimilars, generic drugs, interventional radiology products, cardiovascular drugs, bulk drugs and intermediates of pharmaceuticals, and drugs for diagnosing cancer, as well as GlycoMark, a product as a marker of blood sugar control used for diabetes. The company's Safety Systems Business segment provides airbag inflators, micro gas generators for seatbelt pretensioners, and squibs. Its Agrochemicals Business segment offers agricultural insecticides, herbicides, soil fumigants, and insanitary insecticides. The company also engages in real estate leasing services. The company was formerly known as Nihon Kayaku Seizou Co., Ltd. and changed its name to Nippon Kayaku Co., Ltd. in 1945. Nippon Kayaku Co., Ltd. was incorporated in 1916 and is headquartered in Tokyo, Japan.

How the Company Makes Money

Nippon Kayaku generates revenue through multiple streams, with its primary sources being the sale of pharmaceuticals and specialty chemicals. The Pharmaceuticals segment contributes significantly to the company's earnings through the commercialization of proprietary drugs and licensed products, often supported by research collaborations and partnerships with other pharmaceutical firms. Additionally, the Chemicals segment profits from the production and sale of chemical products used in various industries, including agriculture and food production. Strategic partnerships with research institutions and other companies enhance its product offerings and market reach, further driving revenue growth. The company also invests in R&D to innovate and expand its product lines, which helps maintain its competitive edge and ensures a steady flow of income.

Nippon Kayaku Co Financial Statement Overview

Summary

Nippon Kayaku Co exhibits strong financial performance with consistent revenue growth and improved profitability margins. The balance sheet reflects financial stability with a strong equity base and manageable debt levels. However, the negative free cash flow in 2025 highlights potential challenges in cash management and capital expenditure optimization.

Income Statement

Nippon Kayaku Co has shown consistent revenue growth, with a 10.3% increase in revenue from 2024 to 2025. The gross profit margin for 2025 is robust at 32.1%, and the net profit margin improved significantly from 2.0% in 2024 to 7.9% in 2025. The EBIT margin is strong at 9.2%, demonstrating effective cost management. However, the EBITDA margin decreased slightly from 10.8% in 2024 to 16.3% in 2025, indicating slight pressure on operational efficiency.

Balance Sheet

The company maintains a strong equity position with an equity ratio of 71.6% in 2025, indicating financial stability. The debt-to-equity ratio is moderate at 0.16, showcasing prudent leverage management. The return on equity improved to 6.5% in 2025 from 1.5% in 2024, indicating enhanced shareholder value creation. Despite these strengths, the decrease in stockholders' equity from 2024 to 2025 warrants attention.

Cash Flow

Nippon Kayaku Co's operating cash flow to net income ratio is healthy at 1.46 in 2025, reflecting strong cash generation relative to earnings. However, the free cash flow turned negative in 2025, raising concerns about capital expenditure management. The free cash flow to net income ratio is also negative at -0.21, suggesting challenges in converting profits into free cash flows.

Breakdown	TTM	Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2021
Income Statement
Total Revenue	223.70B	222.58B	201.79B	198.38B	184.81B	173.38B
Gross Profit	70.83B	71.48B	61.30B	66.75B	63.97B	56.32B
EBITDA	34.30B	36.31B	21.73B	35.32B	37.88B	31.10B
Net Income	18.23B	17.51B	4.11B	14.98B	17.18B	12.57B
Balance Sheet
Total Assets	375.50B	373.71B	363.17B	322.86B	315.46B	294.54B
Cash, Cash Equivalents and Short-Term Investments	60.36B	59.76B	66.18B	54.35B	53.65B	48.12B
Total Debt	47.09B	42.10B	31.45B	19.58B	16.65B	19.40B
Total Liabilities	113.50B	105.19B	92.63B	67.83B	69.03B	66.26B
Stockholders Equity	261.06B	267.53B	269.56B	254.02B	245.48B	227.50B
Cash Flow
Free Cash Flow	0.00	-3.73B	7.41B	7.05B	13.67B	10.88B
Operating Cash Flow	0.00	25.53B	23.24B	20.04B	23.14B	24.41B
Investing Cash Flow	0.00	-27.31B	-19.41B	-15.16B	-10.64B	-17.61B
Financing Cash Flow	0.00	-4.76B	3.82B	-7.95B	-11.09B	-8.40B

Nippon Kayaku Co Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1679.50
• 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:4272, the sentiment is Positive. The current price of 1679.5 is below the 20-day moving average (MA) of 1890.88, below the 50-day MA of 1798.72, and above the 200-day MA of 1489.84, indicating a bullish trend. The MACD of 52.96 indicates Negative momentum. The RSI at 80.61 is Negative, neither overbought nor oversold. The STOCH value of 91.26 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:4272.

Nippon Kayaku Co Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4021	75 Outperform	¥932.39B	20.76	19.69%	3.15%	10.06%	18.03%
4272	73 Outperform	¥313.28B	14.47	8.79%	3.97%	6.60%	503.36%
4114	69 Neutral	¥376.27B	21.49	―	5.28%	-0.47%	25.41%
4042	68 Neutral	¥865.05B	25.35	4.79%	4.21%	-1.21%	-27.21%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%
4061	60 Neutral	¥303.43B	-32.48	-4.00%	3.71%	0.24%	-234.36%
3405	60 Neutral	¥575.10B	78.15	1.08%	3.37%	-1.94%	-84.08%

Nippon Kayaku Co Corporate Events

Nippon Kayaku Reshapes Executive Team to Strengthen Mobility, Safety and Communications

Nippon Kayaku has announced a reshuffle of its executive director lineup, effective April 1, 2026, following a resolution at its February 25 Board of Directors meeting. The move realigns leadership roles within key business areas, including the Mobility & Imaging Business Unit and corporate headquarters functions.

Hideyuki Yuya will become Managing Director in charge of the Mobility & Imaging Business Unit while continuing as head of the Polatechno Group, signaling a strengthened focus on this segment. Masako Aono will shift to lead Corporate Communications, and Shigeru Maeda will become Senior Director and head of the Safety Systems Group, changes that are likely aimed at sharpening strategic oversight, enhancing communication, and reinforcing safety-related operations within the company’s core businesses.

The most recent analyst rating on (JP:4272) stock is a Buy with a Yen2146.00 price target. To see the full list of analyst forecasts on Nippon Kayaku Co stock, see the JP:4272 Stock Forecast page.

Nippon Kayaku Lifts Nine-Month Profit and Holds FY2026 Outlook, Confirms ¥60 Dividend

Nippon Kayaku reported consolidated net sales of ¥174.6 billion for the first three quarters of the fiscal year ending March 31, 2026, up 4.0% year on year, while operating and ordinary income declined 9.9% and 11.0% respectively; nevertheless, profit attributable to owners of parent jumped 30.1% to ¥17.3 billion, supported by higher comprehensive income and a reduced share count, lifting earnings per share to ¥112.39. The company’s balance sheet expanded, with total assets rising to ¥406.0 billion and equity to ¥273.0 billion, though the equity ratio slipped to 67.2%, and Nippon Kayaku maintained its full‑year forecast for higher sales and double‑digit growth in bottom‑line profit along with an unchanged dividend plan totaling ¥60 per share, signaling confidence in its earnings resilience and returns to shareholders despite margin pressure.

The most recent analyst rating on (JP:4272) stock is a Buy with a Yen2012.00 price target. To see the full list of analyst forecasts on Nippon Kayaku Co stock, see the JP:4272 Stock Forecast page.

Nippon Kayaku Advances Share Buyback, Acquiring 783,300 Shares in January

Nippon Kayaku has repurchased 783,300 of its own common shares on the Tokyo Stock Exchange between January 1 and January 31, 2026, at a total cost of approximately ¥1.38 billion, as part of its ongoing treasury stock acquisition program authorized under Japan’s Companies Act. This latest buyback forms part of a larger board-approved program, allowing purchases of up to 14 million shares or ¥17 billion from April 2025 to March 2026, under which the company has so far acquired more than 10.35 million shares for about ¥14.65 billion, signaling continued capital return to shareholders and potential efforts to optimize capital structure and enhance shareholder value.

The most recent analyst rating on (JP:4272) stock is a Buy with a Yen2012.00 price target. To see the full list of analyst forecasts on Nippon Kayaku Co stock, see the JP:4272 Stock Forecast page.

Nippon Kayaku Lifts Profit Despite Lower Operating Income, Keeps Full-Year Outlook and Dividend Plan Intact

Nippon Kayaku reported consolidated net sales of ¥174.6 billion for the first three quarters of the fiscal year ending March 31, 2026, a 4.0% increase year on year, while operating income fell 9.9% to ¥16.3 billion and ordinary income declined 11.0% to ¥18.7 billion. Despite the weaker earnings at the operating level, profit attributable to owners of parent jumped 30.1% to ¥17.3 billion, lifting earnings per share to ¥112.39, supported in part by share buybacks that reduced the average number of shares outstanding. The company’s equity ratio eased to 67.2% as total assets grew to ¥406.0 billion, but net assets also rose, and it maintained its full-year guidance, forecasting a 7.7% rise in net sales to ¥239.8 billion and a 16.5% increase in full-year profit attributable to owners of parent to ¥20.4 billion. The dividend plan remains unchanged, with an interim dividend of ¥30 per share already set and a full-year payout of ¥60 per share projected, signaling continued shareholder returns alongside cautious confidence in meeting its earnings targets.

The most recent analyst rating on (JP:4272) stock is a Buy with a Yen2012.00 price target. To see the full list of analyst forecasts on Nippon Kayaku Co stock, see the JP:4272 Stock Forecast page.

Nippon Kayaku Reports Progress on Ongoing Share Buyback Program

Nippon Kayaku Co., Ltd. has disclosed the results of a share buyback conducted on the Tokyo Stock Exchange, acquiring 724,200 of its own common shares for a total of approximately 1.2 billion yen between December 1 and December 30, 2025. This transaction is part of a broader board-approved share repurchase program, under which the company is authorized to buy back up to 14 million shares for as much as 17 billion yen from April 14, 2025 to March 31, 2026, and to date it has cumulatively repurchased 9,569,300 shares for about 13.27 billion yen, signaling an ongoing capital policy aimed at enhancing shareholder returns and optimizing its capital structure.

The most recent analyst rating on (JP:4272) stock is a Buy with a Yen1788.00 price target. To see the full list of analyst forecasts on Nippon Kayaku Co stock, see the JP:4272 Stock Forecast page.