--- title: "Hitachi (TSE:6501) Margin Improvement To 7.6% Tests Concerns Over Premium 28.2x P/E" type: "News" locale: "en" url: "https://longbridge.com/en/news/284356049.md" description: "Hitachi (TSE:6501) reported FY 2026 Q4 revenue of ¥3.1 trillion and EPS of ¥36.08, with a net profit margin improvement to 7.6% from 6.3% last year. The company achieved a 30.3% earnings growth, driven by demand in energy grid modernization and digital services. Despite a high trailing P/E of 28.2x compared to industry averages, analysts expect revenue growth of 7.2% and earnings growth of 12.7%. However, concerns remain about underperforming segments, particularly in China, and the volatility in quarterly earnings highlights the challenges ahead." datetime: "2026-04-28T09:55:38.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/284356049.md) - [en](https://longbridge.com/en/news/284356049.md) - [zh-HK](https://longbridge.com/zh-HK/news/284356049.md) --- # Hitachi (TSE:6501) Margin Improvement To 7.6% Tests Concerns Over Premium 28.2x P/E Hitachi (TSE:6501) has wrapped up FY 2026 with fourth quarter revenue of ¥3.1t and basic EPS of ¥36.08, set against trailing twelve month revenue of ¥10.6t and EPS of ¥176.76 that follows reported earnings growth of 30.3% over the past year. Over recent periods the company has seen quarterly revenue move from ¥2.5t and EPS of ¥30.20 in FY 2025 Q3 to ¥2.8t and EPS of ¥40.20 in FY 2025 Q4, reaching ¥3.1t and EPS of ¥36.08 in FY 2026 Q4. This positions you to focus on how a 7.6% net profit margin compares with the prior 6.3% level and what that means for the quality of the earnings mix. See our full analysis for Hitachi. With the headline numbers on the table, the next step is to see how this earnings profile lines up with the widely followed narratives about Hitachi's growth, risks, and long term potential. See what the community is saying about Hitachi ## TTM earnings growth backs margin story - On a trailing twelve month basis, net income excluding extra items is ¥802.4b on revenue of ¥10.6t, which lines up with the 7.6% net margin cited for the year and compares with ¥615.7b on ¥9.8t a year earlier when margin was 6.3%. - Analysts' consensus view links this margin profile to growing demand for energy grid modernization and digital services, and the data shows that as revenue moved from ¥9.5t to ¥10.6t and net income from ¥575.6b to ¥802.4b, the margin expansion is occurring alongside higher volumes rather than only cost cutting. - The consensus narrative points to Energy and IT segments as key contributors, and the improving net margin from 6.3% to 7.6% is consistent with a higher mix of these higher value businesses in the overall ¥10.6t revenue base. - At the same time, commentary about underperforming areas such as the China elevator and escalator business is reflected in the fact that margin expansion is modest rather than dramatic, so investors can see both tailwinds and drags in the consolidated numbers. ## Premium P/E and DCF fair value gap - The shares trade on a trailing P/E of 28.2x versus peer and Asian Industrials averages of 16.1x and 13.1x, while a DCF fair value of ¥6,245.25 sits above the current ¥5,045 share price and suggests about a 24% gap between the P/E premium and that model estimate. - Critics highlight that paying 28.2x for a company in this sector is a bearish point, yet the DCF fair value and analyst expectations for revenue growth of about 7.2% per year and earnings growth of roughly 12.7% per year create tension with that view. - On one hand, bears point to the valuation being more than 1.7x the peer P/E, which can cap interest if growth or margins slow from the recent 30.3% earnings growth and 7.6% margin. - On the other hand, the combination of a DCF fair value above market price and analyst earnings forecasts together suggest that, if those assumptions hold, the current multiple might not fully price in the ¥802.4b of trailing earnings and expected growth. Start by checking how that rich P/E, the ¥5,045 share price and the DCF fair value stack up against the bearish arguments in the **🐻 Hitachi Bear Case**. ## Quarterly swings inside a stronger year - Within FY 2026, quarterly net income excluding extra items ranged from ¥236.4b in Q1 on revenue of ¥2.4t to ¥163.8b in Q4 on ¥3.1t of revenue, while EPS moved between ¥51.82 and ¥36.08, so the full year picture of 30.3% earnings growth and a 7.6% margin includes some fairly wide intra year variation. - Consensus narrative often leans bullish on long term growth from Energy and Mobility projects, yet these intra year shifts and ongoing references to rising project costs and mixed performance in areas like China elevators remind you that the path to that longer term earnings profile is not perfectly smooth. - For example, Q2 FY 2026 shows EPS of ¥61.86 and net income of ¥280.7b on ¥2.5t of revenue, whereas Q4 delivers higher revenue at ¥3.1t but lower net income at ¥163.8b, hinting that project timing and cost profiles matter a lot for short term results. - When you line those quarterly swings up against the fuller year of ¥10.6t revenue and ¥802.4b net income, it becomes clear why analysts focus more on the trailing and multi year trends rather than any single quarter when forming their growth narratives. If you want to see how different investors connect these margin and growth figures to the longer term story, read through the broader community narratives and valuation work around Hitachi in Curious how numbers become stories that shape markets? Explore Community Narratives. ## Next Steps To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for Hitachi on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves. The article has examined what the recent earnings and valuation signals might imply, but your decision should ultimately be based on your own assessment of the numbers. Given that the company currently screens with 3 key rewards ## Explore Alternatives Hitachi's rich 28.2x P/E, modest margin expansion to 7.6%, and uneven quarterly earnings leave plenty of room for investors to question the risk return trade off. If those valuation and earnings swings feel uncomfortable, compare this profile with companies that currently screen as 46 resilient stocks with low risk scores to find ideas that may better match your risk tolerance. _This article by Simply Wall St is general in nature. **We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice.** It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. 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