In line: MLCC growth driven by AI market, results in line with elevated expectations

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Murata Mfg (6981)

In line: MLCC growth driven by AI market,

results in line with elevated expectations

Maintain Rating: BUY | PO: 11,500 JPY | Price: 7,416 JPY

31 July 2026

Maintain Buy on strong 1Q FY3/27 results

1Q FY3/27 OP was ¥98.5bn (+60% YoY), exceeding both our estimate and the Visible

Alpha (VA) consensus. The company also raised its full-year operating profit (OP)

guidance from ¥380.0bn to ¥430.0bn (+53% YoY). While this is in line with the VA

consensus, the guidance appears conservative considering the strong order intake in 1Q

and the company's FX rate assumption from 2Q onward (US$1 = ¥155). The impact on

OP from a ¥1 movement against the US dollar is approximately ¥4.5bn. However, as

expectations for 1Q results had risen ahead of the announcement, our overall impression

is that the results were in line.

Equity

Masashi Kubota >>

Research Analyst

BofAS Japan

Hazel Xue >>

Research Analyst

BofAS Japan

Component margin exceeds 30% on data center expansion

1Q business profit for the Components business, including MLCCs, was ¥113.6bn (+60%

YoY), with a business profit margin of 32.5%, significantly exceeding our estimate. Data

center-related demand was the primary driver. Companywide sales to the data center

market in 1Q were ¥69.7bn (+81% YoY). The company's full-year sales forecast for data

center market has been raised to ¥370.6bn (+110% YoY) from its previous forecast of

¥325.0bn. Full-year MLCC sales to the data center market are on track to achieve a

growth rate exceeding this level.

Stock Data

MLCC BB ratio remains high at 1.47

The 1Q MLCC BB ratio was a strong 1.47. However, this includes the impact of order

concentration toward Murata Mfg following price increases by certain Asian peers for

distributor channels. The company expects to consider responding through price

adjustments in this market going forward. The assumption for capacity utilization this

fiscal year remains unchanged at 95%. Meanwhile, 1Q business profit for the Devices &

Modules business came in below our estimate, partly due to weak connectivity module

performance.

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