How much can H1 operating profit build on Q1 momentum after the upward revision to ¥8,000 million?

Revenue for the first quarter of the fiscal year ending March 2027 was ¥73,412 million and operating profit was ¥4,664 million. In response, the company raised its cumulative H1 revenue forecast from ¥148,000 million to ¥155,000 million and its operating profit forecast from ¥4,000 million to ¥8,000 million. The full-year forecasts were also revised to revenue of ¥365,000 million and operating profit of ¥33,000 million. Operating profit was increased by ¥4,000 million, or 13.8%, from the previous forecast of ¥29,000 million.

However, Q1 progress against the full-year forecasts was 20.1% for revenue and 14.1% for operating profit, below the simple quarterly elapsed rate of 25%. Working back from the revised H1 forecasts, Q2 standalone revenue of ¥81,588 million and operating profit of ¥3,336 million will be required. Q1 alone generated 58.3% of the H1 operating profit forecast, increasing the likelihood of achieving the target in absolute terms. Revenue, however, was only 47.4% of the H1 forecast, making the timing of order recognition important.

The company cited increasing power demand, growth in US demand, progress on a major project in India, and progress on large-scale projects and percentage-of-completion projects in the social systems business as the background to the upward revision. At the same time, delays in launching new EV models are a concern. Since the contribution of each factor and the project-by-project breakdown of orders and revenue required from Q2 onward have not been disclosed, H1 should confirm whether progress in the power infrastructure and social systems businesses is offsetting weakness related to EVs.

The supplementary earnings materials include Q1 results and full-year forecasts, but do not show progress against the full-year forecasts, the company’s own assessment of the plan, the level required for the remainder of the period, or assumptions such as foreign exchange rates and raw material prices. In the H1 results, it will be necessary to confirm not only whether cumulative operating profit reached ¥8,000 million, but also how much profit the company has built into the second half to maintain full-year operating profit of ¥33,000 million and whether the forecasts have been revised again.