Company Reports

Daikin's revenue and operating profit climbed 18% and 8% year on year, respectively, in the first quarter of fiscal 2026 (ended June). While currency tailwinds and strong data center demand drove top-line growth, operating margins declined by 80 basis points to 9.2% amid higher raw material costs.

Daikin is one of the world’s largest heating, ventilation, and air conditioning companies. The air conditioning segment constantly contributes to over 90% of the company's revenue, and the division’s revenue mix is well-diversified geographically, with the Americas—mostly the United States, Japan, China, and Europe each contributing to over 10% of revenue. Over the years, Daikin has seen decent earnings growth mainly thanks to sales channel expansion in the US and Southeast Asia, robust global demand for high-end products, and the Japanese yen’s depreciation. Meanwhile, the company maintained healthy operating margins over time thanks to cost rationalization and efficiency improvements.

Daikin posted 6% and 3% year-on-year growth in revenue and operating profit, respectively, for fiscal 2025 (ended March 2026). In the midterm plan, the firm targets an operating margin pickup to 12% in fiscal 2030 from 8.3% in fiscal 2025, as well as a 6% five-year CAGR for net sales.

Daikin is one of the world’s largest heating, ventilation, and air conditioning companies. The air conditioning segment constantly contributes to over 90% of the company's revenue, and the division’s revenue mix is well-diversified geographically, with the Americas—mostly the United States, Japan, China, and Europe each contributing to over 10% of revenue. Over the years, Daikin has seen decent earnings growth mainly thanks to sales channel expansion in the US and Southeast Asia, robust global demand for high-end products, and the Japanese yen’s depreciation. Meanwhile, the company maintained healthy operating margins over time thanks to cost rationalization and efficiency improvements.

Daikin posted 8% revenue expansion and 15% operating profit decline year on year in the third quarter of fiscal 2025 (ended December) amid increased raw material and fixed costs. Management raised revenue guidance by 2% but cut its operating profit target by 5% for fiscal 2025.

Daikin is one of the world’s largest heating, ventilation, and air conditioning companies. The air conditioning segment constantly contributes to over 90% of the company's revenue, and the division’s revenue mix is well-diversified geographically, with the Americas—mostly the United States, China, Japan, and Europe each contributing to over 10% of revenue. Over the years, Daikin has seen decent earnings growth mainly thanks to sales channel expansion in the US and Southeast Asia, robust global demand for high-end products, and the Japanese yen’s depreciation. Meanwhile, the company maintained healthy operating margins thanks to cost rationalization and efficiency improvements.

Daikin provided updates on the North American data center cooling market, which it expects to grow to JPY 2.7 trillion in 2030 from JPY 1.1 trillion in 2025. The firm targets over JPY 300 billion in revenue from the business in 2030, more than tripling from about JPY 100 billion in 2025.

Daikin is one of the world’s largest heating, ventilation, and air conditioning companies. The air conditioning segment constantly contributes to over 90% of the company's revenue, and the division’s revenue mix is well-diversified geographically, with the Americas—mostly the United States, China, Japan, and Europe each contributing to over 10% of revenue. Over the years, Daikin has seen decent earnings growth mainly thanks to sales channel expansion in the US and Southeast Asia, robust global demand for high-end products, and the Japanese yen’s depreciation. Meanwhile, the company maintained healthy operating margins thanks to cost rationalization and efficiency improvements.

Daikin reported a 2% growth and 4% drop in revenue and operating profit, respectively, for the second quarter of fiscal 2025 (ended September). Operating margin deteriorated due to higher operating costs and lower profitability of the chemical business, partly offset by selling price hikes.

Daikin reported a 3% decline and 5% growth in revenue and operating profit, respectively, for the first quarter of fiscal 2025 (ended June 2025). The firm's operating margin rose to 10.0% from 9.2% in the same period last year due to cost optimization and selling price hikes.

Daikin is one of the world’s largest heating, ventilation, and air conditioning companies. The air conditioning segment constantly contributes to over 90% of the company's revenue, and the division’s revenue mix is well-diversified geographically, with the Americas—mostly the United States, China, Japan, and Europe each contributing to over 10% of revenue. Over the years, Daikin has seen decent earnings growth mainly thanks to sales channel expansion in the US and Southeast Asia, robust global demand for high-end products, and the Japanese yen’s depreciation. Meanwhile, the company maintained healthy operating margins thanks to cost rationalization and efficiency improvements.

Daikin is one of the world’s largest heating, ventilation, and air conditioning companies. The air conditioning segment constantly contributes to over 90% of the company's revenue, and the division’s revenue mix is well-diversified geographically, with the Americas—mostly the United States, China, Japan, and Europe each contributing to over 10% of revenue. Over the years, Daikin has seen decent earnings growth mainly thanks to sales channel expansion in the US and Southeast Asia, robust global demand for high-end products, and the Japanese yen’s depreciation. Meanwhile, the company maintained healthy operating margins thanks to cost rationalization and efficiency improvements.

Daikin delivered 8% and 2% year-on-year growth in revenue and operating profit, respectively, for fiscal 2024 (ended March 2025), as raw material and fixed cost pressure persisted. The firm expects a 2% and 8% expansion in revenue and operating profit for fiscal 2025, respectively.

Daikin is one of the world’s largest heating, ventilation, and air conditioning companies. The air conditioning segment constantly contributes to over 90% of the company's revenue, and the division’s revenue mix is well-diversified geographically, with the Americas—mostly the United States, China, Japan, and Europe each contributing to over 10% of revenue. Over the years, Daikin has seen decent earnings growth mainly thanks to sales channel expansion in the US and Southeast Asia, robust global demand for high-end products, and the Japanese yen’s depreciation. Meanwhile, the company maintained healthy operating margins thanks to cost rationalization and efficiency improvements.

Daikin posted a 6% year-on-year top-line growth for the third quarter fiscal 2024 (ended December) due to strong numbers of air conditioning business. However, its operating margin contracted to 6.6% from 6.8% a year ago amid a rising raw material and fixed costs.

Daikin is one of the world’s largest heating, ventilation, and air conditioning companies. The air conditioning segment constantly contributes to over 90% of the company's revenue, and the division’s revenue mix is well-diversified geographically, with the Americas—mostly the United States, China, Japan, and Europe each contributing to over 10% of revenue. Over the years, Daikin has seen decent earnings growth mainly thanks to sales channel expansion in the US and Southeast Asia, robust global demand for high-end products, and the Japanese yen’s depreciation. Meanwhile, the company maintained healthy operating margins thanks to cost rationalization and efficiency improvements.

Narrow-moat Daikin Industries reported strong numbers for the first half of fiscal 2024 (ended September 2024) as revenue and operating profit came in above our estimates and management’s prior guidance. Robust demand growth in industrial applied products in the US and residential products in emerging regions such as South Asia played crucial roles, and effective selling price increases and cost reductions supported operating margin. As a result, management raised revenue and operating profit guidance for fiscal 2024 by 5% and 1%, respectively, as it expects sales value expansion in key regions to outshine raw material cost hikes and currency headwinds.

Narrow-moat Daikin reported mixed results for first-quarter fiscal 2024 (ended June 2024). While the top line beat our estimate of robust sales of applied air conditioning products for industrial use and the yen’s depreciation, operating profit lagged because of increases in raw material and fixed costs. Management was confident in achieving the JPY 425 billion operating profit target for fiscal 2024, but flagged that residential product demand will see high uncertainties amid inflationary pressure and slowing economic growth globally. We also expect heightened copper prices and headwinds from Japan’s interest-rate hike to weigh on Daikin’s near-term profitability. Consequently, we lowered our fiscal 2024 operating profit and earnings per share assumptions by 3% and 9%, respectively. That said, we still foresee gradual pickups in Daikin’s margins through fiscal 2028 given product mix upgrades and cost reductions in main regions, which, we believe, have been underappreciated by the market. We maintain our fair value estimate of JPY 25,000 for Daikin and view its shares as underpriced given the recent rout.

Daikin is one of the world’s largest heating, ventilation, and air conditioning companies. The air conditioning segment constantly contributes to over 90% of the company's revenue, and the division’s revenue mix is well-diversified geographically, with the Americas—mostly the United States, China, Japan, and Europe each contributing to over 10% of revenue. Over the years, Daikin has seen decent earnings growth mainly thanks to sales channel expansion in the US and Southeast Asia, robust global demand for high-end products, and the Japanese yen’s depreciation. Meanwhile, the company maintained healthy operating margins thanks to cost rationalization and efficiency improvements.

We resume our coverage of Daikin Industries, Japan's largest heating, ventilating, and air conditioning company, with a fair value estimate of JPY 25,000 per share and a fiscal 2024 (ending March 2025) price/earnings of 26.3 times. We also assign the company narrow moat, Medium Uncertainty, and Standard Capital Allocation ratings. As Daikin actively expands overseas through acquisitions, the North America region is its largest earnings contributor, followed by China and Japan. Despite sluggish global demand, Daikin delivered robust 10.4% revenue growth for fiscal 2023. That said, the 8.9% operating margin missed its prior guidance of 9.4%, which the company ascribed to sales volume contraction and fixed costs expansion, partly offset by selling price hikes and the Japanese yen’s depreciation.