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

Toyo Drilube Co., Ltd.

(TSE/TYO:4976)

Select Model

Rating:79Outperform

Price Target:JPY 1,947.00▲(19.37% Upside)

Action:reiterated

Date:09/08/26

Toyo Drilube achieves a solid overall score driven primarily by its deeply discounted valuation and robust technical momentum. The company benefits from a fortress-like balance sheet with minimal leverage, providing a stable foundation. However, the score is somewhat moderated by underlying operational challenges, specifically recent profit margin contraction and a struggle to generate strong free cash flow from its operations.

Positive Factors

Conservative balance sheetLow leverage and a steadily expanding equity base provide financial resilience for a specialty materials manufacturer. This supports continued investment, improves the company’s ability to withstand demand variability, and preserves flexibility for customer support or capacity needs over the next several quarters.

Negative Factors

Margin compressionFalling EBIT and net margins reduce confidence that recent revenue growth is translating proportionally into earnings. If this pressure persists, it could limit operating leverage, weaken internal funding capacity, and make future profitability more dependent on renewed pricing or cost improvements.

Toyo Drilube Co., Ltd. (4976) vs. iShares MSCI Japan ETF (EWJ)

Market Cap: JPY 6.66B
Dividend Yield: 2.25%
Average Volume (3M): 4,594
Price to Earnings (P/E): 7.0
Beta (1Y): 0.28
Revenue Growth: 4.21%
EPS Growth: -14.11%
Country: Japan
Employees: 532
Sector: General
Sector Strength: 55
Industry: Chemicals - Specialty

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

Company Description

Toyo Drilube Co., Ltd. is a company that focuses on the global development, manufacturing, application, and distribution of specialized solid film lubricants and functional coating agents. Their solid film lubricants are uniquely formulated using mat...

How the Company Makes Money

The company primarily makes money by selling manufacturing materials and processing/technical solutions used by customers to improve sliding performance, durability, and productivity in parts and production lines. Key revenue streams include: (1) pro...

Toyo Drilube Co., Ltd. Financial Statement Overview

Summary

The company maintains a highly secure balance sheet with negligible debt risk and steady top-line revenue growth. However, overall financial strength is constrained by recent profitability headwinds, operating margin contraction, and weak free cash flow conversion.

Income Statement

65Positive

Balance Sheet

88Very Positive

Cash Flow

60Neutral

Financial statement breakdown
Breakdown	TTM	Jun 2025	Jun 2024	Jun 2023	Jun 2022	Jun 2021
Income Statement
Total Revenue	5.41B	5.41B	5.19B	4.70B	3.87B	3.67B
Gross Profit	1.89B	1.89B	1.95B	1.78B	1.37B	1.41B
EBITDA	1.13B	1.09B	1.17B	1.19B	730.19M	965.10M
Net Income	603.75M	603.75M	702.00M	617.00M	332.59M	575.98M
Balance Sheet
Total Assets	13.47B	13.47B	12.82B	12.01B	11.19B	10.69B
Cash, Cash Equivalents and Short-Term Investments	3.93B	3.93B	4.24B	4.61B	4.38B	5.11B
Total Debt	741.50M	741.50M	787.50M	775.50M	846.62M	723.44M
Total Liabilities	2.43B	2.43B	2.45B	2.41B	2.29B	2.18B
Stockholders Equity	11.03B	11.03B	10.36B	9.60B	8.89B	8.50B
Cash Flow
Free Cash Flow	0	159.91M	261.00M	517.92M	-585.07M	190.84M
Operating Cash Flow	0	1.46B	942.00M	1.40B	399.77M	726.26M
Investing Cash Flow	0	-1.96B	-2.02B	-1.08B	-1.23B	-517.62M
Financing Cash Flow	0	-191.65M	-75.00M	-138.68M	-7.74M	-37.39M

Toyo Drilube Co., Ltd. Technical Analysis

Technical Analysis SentimentPositive

Last Price1631.00

Price Trends

50DMA1561.28Positive

100DMA1431.09Positive

200DMA1427.74Positive

Market Momentum

MACD33.24Negative

RSI65.58Neutral

STOCH96.85Negative

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 1631.00 is above the 20-day moving average (MA) of 1586.10, above the 50-day MA of 1561.28, and above the 200-day MA of 1427.74, indicating a bullish trend. The MACD of 33.24 indicates Negative momentum. The RSI at 65.58 is Neutral, neither overbought nor oversold. The STOCH value of 96.85 is Negative, 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

Overall Rating

UnderperformOutperform

Sector (55)

Financial Indicators

JP:4976 against its peers
Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
JP:4095	83Outperform	JPY 208.90B	14.00	―	2.82%	4.59%	14.52%
JP:4976	79Outperform	JPY 6.77B	7.00	―	2.25%	4.21%	-14.11%
JP:4968	76Outperform	JPY 38.55B	13.00	―	2.54%	4.51%	115.09%
JP:4221	74Outperform	JPY 62.03B	9.00	―	4.04%	19.24%	52.95%
JP:4410	62Neutral	JPY 34.10B	7.80	―	3.39%	9.51%	320.91%
JP:4611	56Neutral	JPY 53.88B	21.58	―	3.05%	25.27%	-70.96%
Sector *	55Neutral	$6.65B	3.83	-15.92%	6.20%	10.91%	7.18%

* General Sector Average

Performance Comparison

JP:4976 and its peers over the selected period
Ticker	Company Name	Price	Change	% Change
JP:4976	Toyo Drilube Co., Ltd.	1677.00	341.54	25.57%
JP:4095	Nihon Parkerizing Co., Ltd.	1776.00	478.02	36.83%
JP:4221	Okura Industrial Co., Ltd.	5200.00	438.12	9.20%
JP:4410	Harima Chemicals Group, Inc.	1355.00	490.06	56.66%
JP:4611	Dai Nippon Toryo Company, Limited	1902.00	689.66	56.89%
JP:4968	Arakawa Chemical Industries,Ltd.	1943.00	863.11	79.93%

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.

Date of analysis: Sep 08, 2026

Toyo Drilube Co., Ltd. AI Stock Analysis