Fuso Pharmaceutical Industries,Ltd. (4538) AI Stock Analysis

• Market Cap: ¥21.27B
• Dividend Yield: 3.71%
• Average Volume (3M): 17.49K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.64
• Revenue Growth: 7.50%
• EPS Growth: -281.41%
• Country: JP
• Employees: 1,370
• Sector: Healthcare
• Sector Strength: 45
• Industry: Drug Manufacturers - Specialty & Generic
• EPS (TTM): 99.84
• Shares Outstanding: 9,451,169
• 10 Day Avg. Volume: 18,340
• 30 Day Avg. Volume: 17,486
• PEG Ratio: 0.07
• Price to Book (P/B): 0.53
• Price to Sales (P/S): 0.34
• P/FCF Ratio: -3.84
• 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: 60 Neutral
• Price Target: ¥2,546.00 ▲(9.98% Upside)
• Action: Reiterated Date: 10/29/25
• Date: Action: Reiterated 10/29/25

Fuso Pharmaceutical Industries' overall stock score is driven by solid financial performance in terms of revenue growth and profitability, but is hampered by significant cash flow challenges. Technical indicators suggest neutral momentum, while valuation is mixed with a negative P/E ratio but a strong dividend yield.

Positive Factors

Balance sheet stability and prudent leverage

A debt-to-equity of 0.54 and ~49.5% equity ratio indicate prudent leverage and a strong equity base. This structural balance gives the company financial flexibility to fund R&D, maintain manufacturing capacity, and absorb shocks without forcing near-term asset sales or aggressive refinancing.

Consistent revenue growth with improving margins

Sustained top-line growth (9.3% year-on-year) alongside rising gross and net margins reflects durable demand and effective cost management. Over 2-6 months this supports steady operating cash potential, pricing power in hospital channels, and capacity to reinvest in product supply and incremental portfolio development.

Hospital-focused product mix and in-house manufacturing

A business concentrated on hospital-use drugs and owned manufacturing gives structural advantages: recurring institutional demand, higher switching costs, and supply control. Manufacturing ownership lowers supply disruption risk and supports long-term product quality and contract relationships with hospitals.

Negative Factors

Negative free cash flow and weak cash generation

Material negative free cash flow undermines the company's ability to self-fund capex, working capital, dividends, or strategic initiatives. Even with a decent balance sheet, persistent cash conversion weakness forces reliance on external financing and constrains operational flexibility over the medium term.

Earnings volatility and negative EPS growth

Severely negative EPS growth signals earnings instability, reducing predictability of profits and cash available for reinvestment or payouts. For a pharmaceutical firm, this volatility can reflect pricing, one-offs, or product cycles that impair multi-quarter planning and investor confidence.

Moderate operating margins limit resilience

Relatively modest EBIT/EBITDA margins constrain room to absorb cost inflation, fund higher R&D intensity, or compete on pricing. In specialty/generic pharma, limited margin headroom reduces capacity to scale investments or weather reimbursement pressure without squeezing profitability further.

Fuso Pharmaceutical Industries,Ltd. Business Overview & Revenue Model

Company Description

Fuso Pharmaceutical Industries,Ltd. manufactures and sells pharmaceutical products in Japan. The company offers ethical drugs, such as injectables and artificial kidney dialysates; and medical machinery and equipment. It also rents real estate properties. The company was founded in 1937 and is headquartered in Osaka, Japan.

How the Company Makes Money

Fuso Pharmaceutical Industries generates revenue through multiple streams, primarily from the sale of its pharmaceutical products, including prescription medications and generics. The company has established partnerships with healthcare providers and distributors, allowing for an extensive market reach. Additionally, Fuso engages in research and development (R&D) collaborations with other pharmaceutical firms and institutions, which can lead to financial gains through licensing agreements and joint ventures. The company's ability to innovate and bring new drugs to market, coupled with its focus on high-demand therapeutic areas, significantly contributes to its revenue generation.

Fuso Pharmaceutical Industries,Ltd. Financial Statement Overview

Summary

Fuso Pharmaceutical Industries shows solid revenue growth and stable profitability margins. However, it faces significant challenges in cash flow management, with negative free cash flow and cash generation issues. The balance sheet remains robust with manageable debt levels.

Income Statement

Fuso Pharmaceutical Industries has shown consistent revenue growth, with a 9.31% increase from 2024 to 2025. The gross profit margin for 2025 stands at 27.3%, indicating efficient cost management. The net profit margin improved to 4.59%, reflecting enhanced profitability. However, the EBIT and EBITDA margins, while improved, are moderate at 6.82% and 10.39% respectively, suggesting room for operational efficiency improvements.

Balance Sheet

The balance sheet is stable with a debt-to-equity ratio of 0.54, reflecting prudent leverage levels. The return on equity is 7.11%, showing satisfactory returns on shareholders' investments. Equity ratio is healthy at 49.48%, indicating a strong equity base relative to total assets. However, the slight increase in total debt warrants attention for future leverage control.

Cash Flow

The cash flow statement shows challenges, with a negative free cash flow of -5.43 billion yen in 2025, marking a significant decline. The operating cash flow to net income ratio is negative, highlighting cash generation issues. The free cash flow to net income ratio is also negative, underscoring the need for improved cash management practices.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	15.50B	60.56B	55.41B	51.02B	49.63B	49.25B
Gross Profit	4.08B	16.53B	13.52B	13.74B	13.40B	14.11B
EBITDA	1.36B	6.29B	4.20B	4.63B	4.47B	4.79B
Net Income	462.00M	2.78B	1.38B	1.60B	1.48B	1.61B
Balance Sheet
Total Assets	86.99B	79.05B	75.80B	72.47B	69.33B	69.88B
Cash, Cash Equivalents and Short-Term Investments	3.16B	6.26B	5.12B	8.01B	7.35B	7.07B
Total Debt	28.23B	21.29B	12.72B	12.63B	12.09B	13.20B
Total Liabilities	53.81B	39.94B	39.14B	36.82B	34.80B	36.19B
Stockholders Equity	33.18B	39.11B	36.66B	35.65B	34.53B	33.68B
Cash Flow
Free Cash Flow	0.00	-5.43B	-2.96B	1.28B	2.01B	2.02B
Operating Cash Flow	0.00	-3.31B	627.00M	2.85B	3.50B	3.23B
Investing Cash Flow	0.00	-3.17B	-3.54B	-1.37B	-1.55B	-978.00M
Financing Cash Flow	0.00	7.62B	14.00M	-813.00M	-1.67B	-2.45B

Fuso Pharmaceutical Industries,Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 2315.00
• 50DMA: Positive
• 100DMA: Positive
• 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:4538, the sentiment is Positive. The current price of 2315 is below the 20-day moving average (MA) of 2393.90, below the 50-day MA of 2359.46, and above the 200-day MA of 2196.32, indicating a bullish trend. The MACD of 34.65 indicates Negative momentum. The RSI at 55.45 is Neutral, neither overbought nor oversold. The STOCH value of 68.08 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:4538.

Fuso Pharmaceutical Industries,Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4574	66 Neutral	¥14.77B	16.06	―	―	-5.41%	―
4524	65 Neutral	¥9.45B	16.95	―	2.55%	3.23%	42.87%
4539	64 Neutral	¥6.25B	11.46	―	3.21%	4.25%	―
4538	60 Neutral	¥21.27B	-5.17	―	3.71%	7.50%	-281.41%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%
4512	48 Neutral	¥11.73B	39.28	―	1.06%	5.42%	-62.03%
2929	47 Neutral	¥17.44B	-9.28	―	3.65%	9.53%	-155.76%

Fuso Pharmaceutical Industries,Ltd. Corporate Events

Fuso Pharmaceutical Profit Slumps Despite Modest Sales Growth

Fuso Pharmaceutical Industries reported non-consolidated net sales of ¥48.27 billion for the nine months ended December 31, 2025, up 3.4% year on year, but operating profit dropped 34.8% to ¥2.37 billion and ordinary profit fell 33.7%, with profit declining almost 30%, reflecting margin pressure despite modest revenue growth. The company’s total assets rose to ¥89.45 billion while its equity ratio slipped to 38.7%, and it maintained its dividend policy with a planned annual payout of ¥90 per share for the fiscal year ending March 31, 2026, alongside a full-year forecast of only slight sales growth and lower profits, underscoring a more challenging earnings environment for shareholders.

The most recent analyst rating on (JP:4538) stock is a Hold with a Yen2469.00 price target. To see the full list of analyst forecasts on Fuso Pharmaceutical Industries,Ltd. stock, see the JP:4538 Stock Forecast page.

Fuso Pharmaceutical Sees Profit Slide Despite Higher Sales, Keeps Dividend Outlook Firm

Fuso Pharmaceutical Industries reported non-consolidated net sales of ¥48.27 billion for the nine months ended December 31, 2025, up 3.4% year on year, while operating profit fell 34.8% and profit dropped 29.9%, signaling margin pressure despite modest top-line growth. Total assets increased to ¥89.45 billion and net assets to ¥34.66 billion, but the equity ratio declined from 40.4% to 38.7%, indicating a slightly weaker capital structure.

The company maintained its dividend policy, having paid ¥82 per share in the prior fiscal year and forecasting a higher total dividend of ¥90 per share for the year ending March 31, 2026, underscoring continued shareholder returns. For the full year, Fuso projects modest 1.5% sales growth to ¥61.5 billion but expects double-digit declines in operating and ordinary profit, highlighting ongoing earnings headwinds even as it preserves stable payouts.

The most recent analyst rating on (JP:4538) stock is a Hold with a Yen2482.00 price target. To see the full list of analyst forecasts on Fuso Pharmaceutical Industries,Ltd. stock, see the JP:4538 Stock Forecast page.