Toyo Drilube Co., Ltd. (4976) AI Stock Analysis

• Market Cap: ¥6.37B
• Dividend Yield: 2.32%
• Average Volume (3M): 836.00
• Price to Earnings (P/E): 6.4
• Beta (1Y): 0.48
• Revenue Growth: 8.90%
• EPS Growth: 5.69%
• Country: JP
• Employees: 509
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Chemicals - Specialty
• EPS (TTM): N/A
• Shares Outstanding: 4,065,000
• 10 Day Avg. Volume: 520
• 30 Day Avg. Volume: 836
• PEG Ratio: 0.54
• Price to Book (P/B): 0.51
• Price to Sales (P/S): 1.01
• P/FCF Ratio: 20.14
• 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: 72 Outperform
• Price Target: ¥1,752.00 ▲(17.66% Upside)
• Action: Reiterated Date: 10/11/25
• Date: Action: Reiterated 10/11/25

Toyo Drilube Co., Ltd. has a strong financial foundation with consistent growth and profitability, contributing significantly to its overall score. The stock's attractive valuation further enhances its appeal. However, technical indicators suggest caution due to bearish momentum, which tempers the overall score.

Positive Factors

Low leverage

A debt-to-equity ratio of 0.076 denotes a very conservative capital structure, giving the company durable financial flexibility. Low leverage reduces insolvency risk, preserves borrowing capacity for strategic investments or cyclical downturns, and supports stable dividend or capex policies.

Strong margins

Sustained gross and net margins indicate durable pricing power or manufacturing efficiency in specialty lubricants. High margins provide buffer against input-cost volatility, enable reinvestment in R&D or customer service, and support long-term cash generation and competitive differentiation.

Consistent revenue and improving FCF

Mid-single-digit revenue growth combined with a marked improvement in free cash flow reflects steady demand and better cash conversion after a prior weak base. Together these trends strengthen the company’s ability to fund operations, sustain dividends, and invest in product development over several quarters.

Negative Factors

Weak FCF conversion

A free cash flow to net income ratio of 0.28 indicates limited conversion of accounting profits into discretionary cash. Low conversion constrains capacity to increase capex, pay higher dividends, or deleverage, and makes results more sensitive to working-capital swings or one-time items.

Margin headwinds

Reported declines in EBIT and EBITDA margins suggest emerging cost pressures or lower operational efficiency. Persistent margin erosion would reduce the firm’s ability to absorb input-cost shocks, limit reinvestment capacity, and could weaken the structural profitability advantage in the specialty chemicals market.

Modest capital efficiency

An ROE of 6.77% is modest for a profitable specialty-chemicals manufacturer, indicating limited returns on shareholders’ capital. Over time this may constrain shareholder value creation versus higher-return peers and imply slower internal capital recycling or a business with limited high-ROI expansion opportunities.

Toyo Drilube Co., Ltd. Business Overview & Revenue Model

Company Description

Toyo Drilube Co., Ltd. engages in the research and development, manufacture, coating processing, and sale of solid film lubricants and function film coating agents in Japan and internationally. Its solid film lubricants are formulated with solid lubricants, such as molybdenum disulfide, fluorine resin, or graphite; and dispersed in binders. The company also exports lube products. It serves automobile, optical, electric/electronic, and office automation equipment. Toyo Drilube Co., Ltd. was incorporated in 1962 and is headquartered in Tokyo, Japan.

How the Company Makes Money

Toyo Drilube generates revenue primarily through the sale of its specialized lubricants and drilling fluids to companies in the construction and drilling industries. The company has established key revenue streams through direct sales to end-users, as well as partnerships with distributors and resellers who extend its market reach. Additionally, Toyo Drilube may engage in research and development collaborations with industry partners to create customized solutions, further enhancing its product offerings and driving sales. The company's earnings are also supported by its reputation for quality and reliability, which fosters customer loyalty and repeat business.

Toyo Drilube Co., Ltd. Financial Statement Overview

Summary

Toyo Drilube Co., Ltd. exhibits strong financial health with consistent revenue growth and solid profitability margins. The company maintains a conservative balance sheet with low leverage and effective equity utilization. While cash flow metrics show improvement, there is potential for further enhancement in free cash flow generation.

Income Statement

Toyo Drilube Co., Ltd. has demonstrated consistent revenue growth over the years, with a notable increase of 2.91% in the most recent period. The company maintains strong profitability with a gross profit margin of 37.47% and a net profit margin of 13.52%. However, there is a slight decline in EBIT and EBITDA margins compared to previous years, indicating potential cost pressures.

Balance Sheet

The balance sheet reflects a solid financial position with a low debt-to-equity ratio of 0.076, indicating prudent leverage management. The return on equity is stable at 6.77%, showcasing effective use of equity to generate profits. The equity ratio is strong, highlighting a robust capital structure.

Cash Flow

Cash flow analysis reveals a significant improvement in free cash flow, with a growth rate of 'Infinity' due to a previous negative base. The operating cash flow to net income ratio is healthy at 0.67, though slightly lower than past performance. The free cash flow to net income ratio of 0.28 suggests room for improvement in converting profits into free cash flow.

Breakdown	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Income Statement
Total Revenue	5.19B	4.70B	3.87B	3.67B	6.38B
Gross Profit	1.95B	1.78B	1.37B	1.41B	1.41B
EBITDA	1.17B	1.19B	730.19M	965.10M	887.16M
Net Income	702.00M	617.00M	332.59M	575.98M	453.00M
Balance Sheet
Total Assets	12.82B	12.01B	11.19B	10.63B	9.76B
Cash, Cash Equivalents and Short-Term Investments	4.24B	4.61B	4.38B	5.11B	4.91B
Total Debt	787.00M	775.50M	845.71M	718.30M	693.50M
Total Liabilities	2.45B	2.41B	2.29B	2.13B	1.98B
Stockholders Equity	10.36B	9.60B	8.89B	8.50B	7.78B
Cash Flow
Free Cash Flow	261.00M	517.92M	-585.07M	190.84M	453.12M
Operating Cash Flow	942.00M	1.40B	399.77M	726.26M	690.77M
Investing Cash Flow	-2.02B	-1.08B	-1.23B	-517.62M	235.43M
Financing Cash Flow	-75.00M	-138.68M	-7.74M	-37.39M	-141.20M

Toyo Drilube Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1489.00
• 50DMA: Positive
• 100DMA: Positive
• 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:4976, the sentiment is Positive. The current price of 1489 is below the 20-day moving average (MA) of 1559.95, below the 50-day MA of 1504.87, and above the 200-day MA of 1380.21, indicating a bullish trend. The MACD of 24.53 indicates Positive momentum. The RSI at 60.75 is Neutral, neither overbought nor oversold. The STOCH value of 49.71 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:4976.

Toyo Drilube Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4095	75 Outperform	¥187.96B	13.84	―	3.50%	3.85%	-1.53%
4611	74 Outperform	¥42.32B	5.50	―	3.70%	14.83%	51.42%
4221	73 Outperform	¥62.51B	15.63	―	2.81%	8.28%	0.70%
4976	72 Outperform	¥6.37B	6.40	―	2.32%	8.90%	5.69%
4410	66 Neutral	¥26.45B	13.86	―	4.62%	7.19%	―
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%
4968	61 Neutral	¥30.87B	18.07	―	4.27%	5.72%	28.92%