SAWAI GROUP HOLDINGS Co., Ltd. (4887) AI Stock Analysis

• Market Cap: ¥209.88B
• Dividend Yield: 2.28%
• Average Volume (3M): 299.27K
• Price to Earnings (P/E): 13.9
• Beta (1Y): 0.36
• Revenue Growth: 12.78%
• EPS Growth: -105.43%
• Country: JP
• Employees: 3,482
• Sector: Healthcare
• Sector Strength: 45
• Industry: Drug Manufacturers - Specialty & Generic
• EPS (TTM): 42.46
• Shares Outstanding: 115,487,140
• 10 Day Avg. Volume: 288,420
• 30 Day Avg. Volume: 299,266
• PEG Ratio: -0.24
• Price to Book (P/B): 1.41
• Price to Sales (P/S): 1.30
• P/FCF Ratio: 33.73
• 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: ¥2,640.00
• Price Target Upside: 11.91% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 5
• EPS Forecast (FY): 121.3
• Revenue Forecast (FY): ¥203.85B

• Rating: 59 Neutral
• Price Target: ¥2,223.00 ▼(-5.77% Downside)
• Action: Reiterated Date: 02/18/26
• Date: Action: Reiterated 02/18/26

The score is held back primarily by inconsistent free-cash-flow generation and recent margin compression despite strong TTM revenue growth, alongside a negative P/E that reduces valuation clarity. Technicals are mixed, with weaker short-term trend but support from longer-term moving averages, and the dividend yield is moderate.

Positive Factors

Strong Revenue Growth

A sustained 34% TTM top-line increase indicates durable demand for the company’s generics portfolio and expanding sales scale in its core domestic market. Strong revenue momentum supports reinvestment capacity and provides a base to offset pricing or cost pressures over 2–6 months.

Positive Cash Generation

Consistent positive operating cash flow (¥20.3B TTM) and positive free cash flow (¥5.8B TTM) show the business can convert sales into cash. This underpins funding for capex, working capital and dividends, providing financial flexibility despite some FCF volatility in prior years.

Substantial Equity Base

A sizable equity cushion (¥178.8B of equity against ¥377.0B assets) and sector-manageable leverage give balance-sheet stability. This capital base supports R&D, manufacturing continuity and resilience to reimbursement or demand shifts common in generics over the medium term.

Negative Factors

Margin Compression

Net margin decline from ~12.1% to ~4.9% TTM signals structural pressure on profitability, likely from pricing, mix shifts or cost increases. Persistently lower margins will reduce internal funding for growth and weaken returns, making long-term margin recovery a key risk.

Volatile Free Cash Flow

While FCF is currently positive, its decline and historical volatility (including negative FCF in FY2023–FY2024) undermine predictability of discretionary cash. This volatility can constrain investments, increase reliance on external funding, and complicate capital allocation over multiple quarters.

Weakened Returns & Rising Leverage

ROE halved while debt-to-equity rose, indicating lower efficiency of capital and greater financial leverage. Reduced return on equity combined with higher leverage raises vulnerability to margin shocks and limits ability to generate attractive shareholder returns sustainably.

SAWAI GROUP HOLDINGS Co., Ltd. Business Overview & Revenue Model

Company Description

Sawai Group Holdings Co., Ltd., together with subsidiaries, engages in the research, development, manufacturing, and marketing of generic pharmaceutical products primarily in Japan and the United States. It offers generic drugs in various dosage forms, including tablets, oral dispersing tablets, capsules, granules, injectables, tapes, ophthalmic or nasal solutions, syrups, and other forms in the therapeutic areas of cardiovascular, gastro-intestinal, blood/body fluid, other metabolic, antibiotics, central nervous system, antiallergics, urogenital organs and the anus, antineoplastic, vitamins, anti-cancer, chemotherapeutic agents, respiratory organ agents, hormone agents, etc. The company's products include atorvastatin, limaprost alfadex, lansoprazole, aprepitant, micafungin sodium, silodosin, blonanserin, oseltamivir, capecitabine, atomoxetine hydrochloride, nalfurafine, memantine hydrochloride, eldecalcitol, bazedoxifene, fexofenadine hydrochloride, dutasteride, pregabalin, duloxetine hydrochloride, morphine sulfate tablets, tosymra nasal spray, zembrace symtouch, and ramelteon tablets. It also manufactures and sells medicinal products. The company sells its generic drugs to distributors, retail stores, and other pharmaceutical manufacturers, as well as directly to medical institutions, such as hospitals, general practitioners, and dispensing pharmacies in Japan; and pharmaceutical products to wholesalers in the United States. Sawai Group Holdings Co., Ltd. was founded in 1929 and is headquartered in Osaka, Japan.

How the Company Makes Money

The company makes money mainly through the sale of pharmaceutical products manufactured and marketed by its operating subsidiaries. Its primary revenue stream is domestic (Japan) sales of generic prescription medicines supplied to medical institutions and dispensed through pharmacies via pharmaceutical wholesalers and distribution channels. Revenue is generated on a per-product basis from shipment volumes and product pricing under Japan’s reimbursement and drug pricing framework. Additional earnings may come from supplying contract-manufactured products, licensing/authorized generics arrangements, or other pharmaceutical-related services if conducted by group companies; specific contributions of these items are null. Significant partnerships, customer concentration, and the breakdown by business segment are null.

SAWAI GROUP HOLDINGS Co., Ltd. Financial Statement Overview

Summary

Income statement strength from strong TTM revenue growth (+34%) and continued profitability is tempered by margin compression (TTM net margin ~4.9% vs FY2025 ~12.1%). Balance sheet is generally stable but leverage has increased (debt-to-equity ~0.60 vs ~0.41 in FY2024) and ROE has weakened (~5.4% TTM vs ~12.4% FY2025). Cash flow is the main drag: free cash flow is positive (¥5.8B TTM) but volatile and declining (TTM growth -8.74), with modest cash conversion (~34% of net income).

Income Statement

Results show solid top-line momentum, with revenue up strongly in TTM (Trailing-Twelve-Months) (+34%) after steady growth in FY2024–FY2025, despite a sharp decline in FY2023. Profitability is positive in recent periods (TTM net margin ~4.9% and EBIT margin ~8.8%), but margins have compressed versus prior annual levels (FY2025 net margin ~12.1%), pointing to weaker earnings quality or higher costs. The business has also demonstrated it can swing from a large loss (FY2022) back to profitability, which is a strength, but it adds volatility risk to the earnings profile.

Balance Sheet

Leverage looks manageable for the sector, with debt-to-equity at ~0.60 in TTM (Trailing-Twelve-Months) (up from ~0.41 in FY2024), indicating rising reliance on debt. Equity remains substantial (TTM equity ¥178.8B vs. assets ¥377.0B), supporting balance-sheet stability. Returns on equity are positive but modest in TTM (~5.4%) and down meaningfully from FY2025 (~12.4%), suggesting profitability has weakened relative to the capital base.

Cash Flow

Cash generation is positive but uneven. TTM (Trailing-Twelve-Months) operating cash flow is healthy (¥20.3B) and free cash flow is positive (¥5.8B), but free cash flow declined (TTM growth -8.74) and has been volatile (negative in FY2023 and FY2024). Cash conversion is also moderate: free cash flow is about 34% of net income in TTM, implying a meaningful portion of earnings is not translating into discretionary cash after investment needs.

Breakdown	TTM	Mar 2026	Mar 2025	Mar 2024	Mar 2023	Mar 2022
Income Statement
Total Revenue	200.68B	189.02B	176.86B	200.34B	193.82B	187.22B
Gross Profit	57.97B	56.35B	54.32B	62.63B	68.95B	72.43B
EBITDA	14.32B	19.44B	36.88B	34.87B	-20.18B	35.75B
Net Income	-2.74B	11.97B	13.70B	12.67B	-28.27B	12.34B
Balance Sheet
Total Assets	377.03B	354.62B	382.02B	364.17B	349.50B	393.34B
Cash, Cash Equivalents and Short-Term Investments	46.12B	38.78B	26.37B	33.08B	47.72B	54.27B
Total Debt	122.49B	95.11B	87.13B	77.07B	70.80B	70.58B
Total Liabilities	198.23B	180.77B	163.99B	151.43B	149.42B	152.59B
Stockholders Equity	178.80B	173.85B	212.66B	201.64B	190.07B	218.28B
Cash Flow
Free Cash Flow	5.85B	7.28B	5.23B	-7.70B	19.80B	18.86B
Operating Cash Flow	20.29B	27.85B	23.15B	13.03B	34.31B	31.86B
Investing Cash Flow	-24.94B	6.48B	-23.11B	-27.13B	-30.39B	-21.79B
Financing Cash Flow	14.93B	-32.70B	2.36B	-1.27B	-11.26B	-11.99B

SAWAI GROUP HOLDINGS Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 2359.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:4887, the sentiment is Negative. The current price of 2359 is above the 20-day moving average (MA) of 2231.57, above the 50-day MA of 2321.33, and above the 200-day MA of 2054.10, indicating a neutral trend. The MACD of -51.40 indicates Positive momentum. The RSI at 37.31 is Neutral, neither overbought nor oversold. The STOCH value of 50.35 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:4887.

SAWAI GROUP HOLDINGS Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4516	77 Outperform	¥331.78B	9.44	―	2.12%	4.07%	22.59%
4886	76 Outperform	¥56.87B	8.62	―	2.52%	5.44%	-20.33%
4554	68 Neutral	¥57.11B	35.63	5.01%	2.39%	12.01%	-51.38%
4553	67 Neutral	¥190.46B	5.05	12.02%	2.14%	9.32%	30.85%
4547	66 Neutral	¥180.54B	14.92	6.70%	2.48%	13.11%	41.57%
4887	59 Neutral	¥209.88B	13.89	―	2.28%	12.78%	-105.43%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%

SAWAI GROUP HOLDINGS Co., Ltd. Corporate Events

Sawai Group Posts Profit Drop on Higher Sales, Keeps Dividend and Sees Earnings Rebound

Sawai Group Holdings reported consolidated revenue of ¥154.9 billion for the nine months ended Dec. 31, 2025, up 8.1% year-on-year, but operating profit fell 25.7% to ¥15.9 billion and profit attributable to owners of the parent slumped 57.8% to ¥10.7 billion, reflecting weaker profitability despite topline growth. Total assets rose to ¥377.0 billion and equity attributable to owners reached ¥178.8 billion, while the company maintained its dividend outlook, targeting a total of ¥55 per share for the year ending March 31, 2026, and forecast full-year revenue of ¥202.5 billion and a sharp rebound in operating profit, signaling expectations of earnings recovery from its continued operations.

The dividend forecast for the full year remains unchanged.

The most recent analyst rating on (JP:4887) stock is a Hold with a Yen2567.00 price target. To see the full list of analyst forecasts on SAWAI GROUP HOLDINGS Co., Ltd. stock, see the JP:4887 Stock Forecast page.