Denso Corporation (TSE: 6902), the Kariya-headquartered, Toyota-Group-affiliated global auto-parts major and one of the world's largest Tier 1 suppliers, reported FY3/2026 consolidated IFRS results showing solid revenue growth alongside a more measured profit advance. Revenue rose 5.3% year-on-year to ¥7,539,975 million, operating profit advanced 6.5% to ¥552,538 million, profit before tax rose 6.8% to ¥617,291 million, profit for the year increased 4.8% to ¥487,512 million, and profit attributable to owners climbed 5.9% to ¥443,755 million. Basic EPS came in at ¥162.96 versus ¥145.02.
Total comprehensive income swung sharply to ¥1,001,678 million from a ¥136,555 million loss a year earlier, reflecting a dramatic reversal in FX translation and equity-investment marks against a particularly weak FY3/2025 reference. The operating margin held at 7.3%, while ROE on owner-attributable equity stepped down to 8.5% from 8.0%. Equity-method investment income jumped to ¥12,369 million from ¥8,999 million.
Balance sheet and cash flow
Total assets expanded to ¥8,730,854 million from ¥8,125,000 million, with equity attributable to owners reaching ¥5,492,689 million. The owner equity ratio strengthened to 62.9% from 61.3%, and per-share equity attributable to owners advanced to ¥2,040.42 from ¥1,767.02. Operating cash flow contracted to ¥511,025 million from ¥758,743 million on higher working-capital needs; investing activities used a much smaller ¥16,886 million versus a ¥121,899 million inflow in the prior year; financing activities used ¥355,003 million, including a continued buyback program that lifted treasury shares to 219.0 million from 93.7 million. Cash and equivalents at year-end rose to ¥1,189,126 million.
Dividend raised to ¥67
The FY3/2026 full-year dividend was raised to ¥67.00 per share (¥32 interim + ¥35 year-end), up from ¥64.00, with total cash dividends paid of ¥180,754 million. The consolidated payout ratio sits at 41.1% and the DOE at 3.5%. Management is guiding a further increase to ¥74.00 for FY3/2027 (¥37 + ¥37), implying a payout ratio of 50.4% on the lower guided earnings — a signal that Denso intends to defend shareholder returns through the upcoming margin trough.
FY3/2027 guidance: cyclical reset
For FY3/2027 management guides revenue of ¥7,670,000 million (+1.7%), operating profit of ¥500,000 million (-9.5%), profit before tax of ¥553,000 million (-10.4%), and profit attributable to owners of ¥382,000 million (-13.9%), with basic EPS guided to ¥146.95. The deceleration reflects three drivers commonly cited across the auto-parts sector this season: (i) more cautious global light-vehicle production assumptions, (ii) U.S. tariff-policy risk on cross-border component flows, and (iii) a more conservative yen assumption that compresses the translation contribution from a sizable foreign earnings base.
| Metric | FY3/2026 | FY3/2025 | YoY |
|---|---|---|---|
| Revenue (¥ million) | 7,539,975 | 7,161,777 | +5.3% |
| Operating profit (¥ million) | 552,538 | 518,953 | +6.5% |
| Profit before tax (¥ million) | 617,291 | 578,005 | +6.8% |
| Profit attributable to owners (¥ million) | 443,755 | 419,081 | +5.9% |
| Basic EPS (¥) | 162.96 | 145.02 | +12.4% |
| Operating margin | 7.3% | 7.2% | +0.1pp |
| ROE (owners) | 8.5% | 8.0% | +0.5pp |
| Total comprehensive income (¥ million) | 1,001,678 | −136,555 | n/m |
| Annual dividend (¥) | 67.00 | 64.00 | +4.7% |
JapanStockPulse provides informational content only and does not constitute investment advice. Figures are taken from the company's published earnings short report and may be subject to subsequent revision.