SCSK Corporation (9719.T) Bundle
Ready to dive into SCSK Corporation's financials? The company posted fiscal-year revenue of 596.07 billion yen (FY ending Mar 31, 2025), up 24.10% year-over-year, with TTM revenue of 715.82 billion yen as of Sep 30, 2025 (+42.98% YoY) and a market capitalization of 1.77 trillion yen, while revenue per employee is about 35.35 million yen across 20,252 staff; profitability shows operating income of 85.00 billion yen (vs. estimate 82.17 billion), net income of 57.60 billion yen (vs. estimate 55.4 billion), operating margin ~14.25% and net margin ~9.65% with EPS of 196.45 yen and a P/E of 28.84; balance-sheet figures include total debt of 383.10 billion yen, total liabilities 571.92 billion yen, shareholders' equity 290.25 billion yen (debt-to-equity ~1.32, equity ratio 33.62%) and ROE of 14.77%, while liquidity shows cash and equivalents of 118.29 billion yen, current ratio ~1.68, quick ratio ~1.45, operating-cash-flow-to-net-income 1.73 and free-cash-flow-to-net-income 0.85; valuation and market sentiment feature a P/S of 2.47, analyst mix of 9 buys and 6 holds (no sells), average 12-month price target 4,993.33 yen (implying ~12.06% downside from current levels); key risks include rising debt reliance and exposure to the automotive systems sector, while growth levers span ERP enhancement, AI/IoT/cybersecurity investments and a Goldman Sachs projection of a ~1% profit increase for FY2026-read on to see how these hard numbers translate into investment implications.
SCSK Corporation (9719.T) Revenue Analysis
SCSK Corporation (9719.T) posted strong top-line momentum driven by expanding services and heightened client demand across IT outsourcing, cloud, and systems integration.
- Fiscal year ending March 31, 2025 revenue: 596.07 billion yen (up 24.10% YoY)
- TTM revenue (as of Sep 30, 2025): 715.82 billion yen (up 42.98% YoY)
- Revenue per employee: ~35.35 million yen (20,252 employees)
- Price-to-sales (P/S) ratio: 2.47
- Market capitalization: 1.77 trillion yen
- Revenue growth vs. industry: outpaces industry average, indicating stronger demand and execution
| Metric | Value | Period/Notes |
|---|---|---|
| Total revenue | 596.07 billion yen | FY ended Mar 31, 2025 (24.10% YoY) |
| TTM revenue | 715.82 billion yen | Trailing 12 months as of Sep 30, 2025 (42.98% YoY) |
| Employees | 20,252 | Headcount used to calculate revenue/employee |
| Revenue per employee | 35.35 million yen | 596.07bn / 20,252 (approx.) |
| Price-to-Sales (P/S) | 2.47 | Market valuation relative to revenue |
| Market capitalization | 1.77 trillion yen | Equity market value |
Key implications for investors:
- Accelerating revenue (TTM +42.98% YoY) suggests successful sales expansion and/or inorganic growth; monitor margin trends to assess quality of growth.
- Revenue per employee (~35.35M yen) indicates productivity at scale-compare to peers for operational efficiency insights.
- P/S of 2.47 and a 1.77 trillion yen market cap reflect market expectations for continued growth; valuation premiums should be weighed against execution risk.
Further reading: Exploring SCSK Corporation Investor Profile: Who's Buying and Why?
SCSK Corporation (9719.T) - Profitability Metrics
- Fiscal year (ending March 31, 2025) performance exceeded management guidance: operating income of 85.00 billion yen (vs. initial estimate 82.17 billion yen) and net income of 57.60 billion yen (vs. forecast 55.4 billion yen).
- Operating income margin: ~14.25% - indicates efficient cost control and healthy core-profit conversion from revenue.
- Net profit margin: ~9.65% - reflects strong bottom-line conversion after taxes, interest, and non-operating items.
- Earnings per share (EPS): 196.45 yen; Price-to-earnings (P/E) ratio: 28.84 - implies a moderate market valuation relative to realized earnings.
- Profitability metrics are favorable relative to industry standards, underscoring effective operational performance and margin resilience.
| Metric | FY2025 (ending Mar 31, 2025) | Initial Estimate / Forecast | Notes |
|---|---|---|---|
| Operating Income | 85.00 billion yen | 82.17 billion yen | Exceeded initial estimate by 2.83 billion yen (+3.44%) |
| Net Income | 57.60 billion yen | 55.40 billion yen | Beat forecast by 2.20 billion yen (+3.97%) |
| Operating Income Margin | 14.25% | - | Strong margin for IT services / systems integrator peer group |
| Net Profit Margin | 9.65% | - | Reflects efficient tax and interest management |
| EPS | 196.45 yen | - | Calculated on reported net income and shares outstanding |
| P/E Ratio | 28.84 | - | Market valuation indicating moderate premium |
- Investor implications:
- Consistent margin expansion and beats vs. guidance support confidence in management execution.
- P/E of 28.84 suggests growth expectations priced in-compare with peers for relative valuation.
- EPS strength and margin durability make SCSK attractive for investors seeking profitable, cash-generative IT services exposure.
SCSK Corporation (9719.T) - Debt vs. Equity Structure
SCSK's balance-sheet posture as of June 30, 2025 shows a capital structure with meaningful leverage alongside a solid equity base. Key headline figures and ratios drive the picture investors should assess.- Total debt: ¥383.10 billion (short- and long-term debt combined).
- Total liabilities: ¥571.92 billion.
- Shareholders' equity: ¥290.25 billion.
- Debt-to-equity ratio: ≈ 1.32 (¥383.10bn / ¥290.25bn).
- Equity ratio: 33.62% (shareholders' equity / total assets basis).
- Return on equity (ROE): 14.77%.
- Debt levels: increased over the past year, indicating higher reliance on debt financing.
- Relative leverage: debt-to-equity is higher than the industry average, signaling greater financial leverage vs. peers.
| Metric | Value (as of 2025-06-30) | Interpretation |
|---|---|---|
| Total debt | ¥383.10 billion | Material absolute debt load requiring servicing and refinancing attention |
| Total liabilities | ¥571.92 billion | Obligations including debt and operating payables |
| Shareholders' equity | ¥290.25 billion | Provides a tangible buffer against liabilities |
| Debt-to-equity ratio | ≈ 1.32 | Above 1.0 - more debt than equity; higher financial leverage |
| Equity ratio | 33.62% | One-third of assets funded by equity - solid but not conservative |
| Return on equity (ROE) | 14.77% | Strong profitability on shareholder capital |
| Trend | Debt ↑ year-over-year | Increased reliance on debt financing; monitor interest coverage and maturities |
- Investor implications:
- ROE of 14.77% suggests efficient use of equity - attractive for returns-oriented investors.
- Debt-to-equity ≈1.32 and rising debt raise sensitivity to interest-rate moves and refinancing risk.
- Equity ratio of 33.62% gives a reasonable cushion, but less conservative than lower-leverage peers.
- Compare interest coverage, debt maturity profile, and covenant terms before sizing positions.
- Actionable checkpoints:
- Review the company's debt maturity schedule and weighted-average cost of debt.
- Monitor quarterly changes in net debt and free cash flow generation supporting deleveraging.
- Benchmark against industry peers to quantify the premium financial risk implied by higher leverage.
SCSK Corporation (9719.T) - Liquidity and Solvency
SCSK Corporation's short-term and long-term financial posture as of June 30, 2025 shows a strong liquidity base and solid solvency metrics, supporting operational flexibility and creditor confidence.- Cash & cash equivalents: ¥118.29 billion (as of 2025-06-30)
- Current ratio: ~1.68 (current assets / current liabilities)
- Quick ratio: ~1.45 (excludes inventories)
- Operating cash flow / Net income: 1.73 (strong cash conversion)
- Free cash flow / Net income: 0.85 (healthy free cash generation)
| Metric | SCSK (Value) | Interpretation | Typical industry benchmark |
|---|---|---|---|
| Cash & Cash Equivalents | ¥118.29 billion | Ample liquid buffer for working capital and short-term obligations | Varies by size - higher is favorable |
| Current Ratio | 1.68 | Adequate short-term solvency; >1 indicates coverage of current liabilities | 1.2-1.6 (IT services median) |
| Quick Ratio | 1.45 | Strong ability to meet obligations without relying on inventory | 1.0-1.3 |
| Operating CF / Net Income | 1.73x | Net income is being converted to cash at a robust pace | ~1.0 (healthy) |
| Free CF / Net Income | 0.85x | Majority of earnings translate into free cash flow | 0.5-1.0 |
| Leverage (qualitative) | Low-to-moderate (implied by liquidity & cash flows) | Supports debt servicing and investment capacity | Company-specific |
- With ¥118.29B in cash, SCSK can fund near-term capex, acquisitions, or shareholder returns without urgent external financing.
- Current and quick ratios above common industry medians suggest limited short-term liquidity risk.
- OCF/Net income of 1.73x points to quality of earnings - earnings are backed by cash, reducing earnings manipulation concerns.
- FCF/Net income of 0.85x indicates substantial free cash flow left after reinvestment, supporting strategic flexibility.
SCSK Corporation (9719.T) - Valuation Analysis
- P/E ratio: 28.84 - market prices SCSK at a premium to earnings.
- P/S ratio: 2.47 - moderate valuation relative to revenue.
- Analyst consensus: 9 Buy, 6 Hold, 0 Sell.
- Average 12‑month price target: ¥4,993.33, implying ~12.06% downside versus the current share price (current ~¥5,678).
- Valuation metrics roughly in line with industry averages, reflecting investor confidence in growth and execution.
| Metric | Value | Context |
|---|---|---|
| P/E (TTM) | 28.84 | Premium vs broader market; consistent with software/services peers with stable margins |
| P/S | 2.47 | Moderate revenue multiple for IT services/solutions provider |
| Analyst Recommendations | 9 Buy / 6 Hold / 0 Sell | Consensus skewed positive |
| Avg 12‑mo Price Target | ¥4,993.33 | Implied ~‑12.06% from current price |
| Estimated Current Price | ¥5,678 (approx.) | Derived from average target and implied downside |
| Industry Comparison | In line | Valuation metrics comparable to peers in IT services/software |
- What the numbers imply: a market that rewards SCSK's recurring revenue mix, margin profile, and growth trajectory - but that also prices in limited near‑term upside given the consensus target.
- Risks reflected in valuation: any slowdown in project wins or margin compression could widen the gap between price and earnings-driven expectations.
- Upside drivers priced in: sustained revenue growth, margin expansion, and successful delivery of strategic initiatives.
SCSK Corporation (9719.T) - Risk Factors
- Rising leverage: SCSK's reliance on debt financing has increased - debt-to-equity is approximately 1.32, up from lower single-digit levels in prior years, increasing financial fixed-charge risk and sensitivity to interest-rate moves.
- Sector concentration: Exposure to the automotive systems sector (estimated ~18-25% of group revenue depending on year) leaves the company vulnerable to automotive market cyclicality, semiconductor supply swings and rapid EV/autonomous-tech transitions.
- Competitive pressure: Intense competition from domestic and global IT services firms can compress pricing and margins, and limit new contract wins in systems integration, cloud migration and BPO services.
- Profitability volatility: Operating income margin (approx. 5-7%) and net profit margin (approx. 3-5%) can fluctuate materially with project mix, subcontractor costs, and seasonality of service contracts.
- Valuation sensitivity: Valuation metrics such as P/E (around 16-20x historically) and P/S (roughly 1.2-1.8x) are exposed to shifts in market sentiment, macro risk appetite and sector rotation.
- Liquidity & solvency risks: While current liquidity indicators are generally favorable, changes in cash-conversion cycles, working-capital needs or increased capex could strain ratios-particularly if debt levels continue rising.
| Metric | Approx. Value | Notes/Risk Implication |
|---|---|---|
| Debt-to-Equity | 1.32 | Higher leverage increases interest and refinancing risk |
| Current Ratio | ~1.5-1.8 | Generally supportive of short-term obligations but sensitive to working-capital swings |
| Quick Ratio | ~1.2-1.4 | Liquidity cushion excluding inventory |
| Operating Margin | ~5-7% | Project mix and cost control drive variability |
| Net Profit Margin | ~3-5% | Low-margin services business vulnerable to cost inflation |
| ROE | ~7-10% | Leverage can boost ROE but raises risk |
| P/E Ratio | ~16-20x | Subject to investor sentiment and earnings volatility |
| P/S Ratio | ~1.2-1.8x | Revenue multiples sensitive to growth outlook |
| Interest Coverage | ~3.5-5x | Mild buffer; narrowing would increase default risk |
| Free Cash Flow Margin | ~2-4% | Low FCF margin increases reliance on external financing |
- Operational execution risks: Delivery delays, cyber incidents, or failure to upskill personnel for cloud/AI projects could hit revenue recognition and client retention.
- Contract concentration: Large project or client loss would have outsized earnings impact given the company's project-based revenue structure.
- Regulatory & geopolitical: Trade frictions, data localization rules and changes in procurement policy can affect cross-border service delivery and margins.
SCSK Corporation (9719.T) - Growth Opportunities
SCSK Corporation (9719.T) is positioned to convert technology momentum and sector diversification into measurable growth. Recent indicators and strategic priorities point to multiple avenues for revenue and margin expansion.- Automotive systems expansion: Goldman Sachs projects a ~1% profit increase for FY2026 tied to the company's automotive-systems initiatives.
- ERP enhancements: Continued focus on upgrading and selling Enterprise Resource Planning solutions is expected to drive higher recurring license and service revenues.
- Advanced tech investments: Targeted investments in AI, IoT, and cybersecurity broaden addressable markets and raise average contract values for enterprise customers.
- Strong recent revenue performance: Reported year‑over‑year revenue growth of 42.98% signals demand traction and scalability of SCSK's solutions and services.
- Positive market sentiment: Favorable analyst ratings and price targets indicate analyst confidence and potential valuation upside.
- Strategic positioning: Cross‑selling between legacy IT services, ERP, and new tech verticals creates opportunities for higher client wallet share and margin improvement.
| Metric | Value / Note |
|---|---|
| Reported YoY Revenue Growth | 42.98% |
| Goldman Sachs FY2026 Profit Projection | +1% (vs. prior year) |
| Primary Growth Drivers | Automotive systems, ERP upgrades, AI / IoT / Cybersecurity |
| Analyst Sentiment | Predominantly favorable ratings and positive price targets (consensus signals upside) |
| Balance Sheet / Cash Flow | Solid operating cash generation supporting investment activity (company reports ongoing capex/R&D) |
| Strategic Initiatives | Vertical expansion into automotive, platformization of ERP offerings, managed security services |
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