Transformers are short worldwide, and it is starting to show in Japanese results. We looked for companies whose main business is grid equipment or grid construction. Katana kept 138 companies whose annual reports use grid and transformer terms, and AI read each one and supported 25.
In a September 2026 report, McKinsey projected global transformer demand to rise about 40% by 2035, as electrification, renewables and data centers drive grid investment. Supply is not keeping up: the backlog of unfilled orders, over 1,000 GVA in 2024, is expected to swell to about 1,690 GVA by 2030. On September 15, 2026, Hitachi announced a $528 million transformer factory in Mississippi, more than twice the size of its existing plant.
This demand already shows in Japanese companies' results. Meidensha's annual report says its power infrastructure business hit record sales and operating profit, and its substation business grew sales and profit on rising demand in the U.S. and Singapore. Hitachi grew sales in its energy segment on large projects and backlog conversion in its power grid business. Lead times are stretching in Japan too: on September 8, 2026, a distributor of Hitachi Industrial Equipment Systems' distribution transformers sent its 26th notice of revised lead times, with some small oil-immersed units going from four months to six.
So which Japanese companies make grid equipment or grid construction their main business? We searched annual reports with Katana.
“We want companies whose main business is selling equipment, materials, or construction and maintenance services for power transmission and distribution grids, such as power transformers, substation equipment, switchgear, circuit breakers, power cables, insulators, and transmission and distribution line construction. We do not want utilities that only operate the grid.”
We used a word condition to keep companies whose annual reports use grid and transformer terms, turned this profile into two questions entered in English, and had the AI read each report, question by question.
Katana computes its metrics for every company.
AI reads each annual report and judges support and counterevidence.
The questions were entered in English and judged in order.
read the filings and supported 25.
Of 138 companies, 25 were supported, 31 need review and 82 had counterevidence. Below are the 22: two each from power equipment, cables and materials, and electrical construction first, then the rest in the same order.
Power infrastructure sales rose 16.7% to ¥100.8 billion, with record sales and operating profit.Filing ↗
Power equipment sales rose 6.7% to ¥63.9 billion and segment profit 54.5% on more extra-high-voltage substation projects.Filing ↗
Grew orders by expanding output of SICONEX connectors for high-voltage power cables, with a second expansion due to contribute from the second half of fiscal 2026.Filing ↗
Its power and telecom infrastructure business makes and sells materials for transmission, distribution and telecom facilities.Filing ↗
Names building equipment work and transmission and distribution work as its two pillars.Filing ↗
Transmission line orders roughly tripled to ¥20.5 billion on tower replacement, interregional link and data center projects.Filing ↗
Energy segment revenue rose on strong large power grid projects and steady conversion of its order backlog.Filing ↗
Energy management sales rose 6.1% to ¥128.2 billion on substation equipment upgrades and battery system demand.Filing ↗
Its power equipment business makes and sells transformers and control equipment and does power facility work.Filing ↗
Energy management sales and profit rose on more battery projects and large orders for substation and power supply equipment.Filing ↗
Its power division makes and sells monitoring and control systems for power plants and substations, distribution automation systems and distribution equipment.Filing ↗
Switchboard sales rose 6.3% to ¥73.0 billion as sales of high-voltage power receiving equipment grew.Filing ↗
Demand for power cables and substation equipment held firm in its environment and energy business.Filing ↗
Expanded power cable manufacturing and installation capacity on firm demand for extra-high-voltage underground and offshore cables.Filing ↗
Its main businesses are overhead line hardware, towers and steel structures, plus building materials.Filing ↗
Utilities' capital spending centered on replacing aging transmission and distribution equipment.Filing ↗
Does electrical work including distribution and transmission lines and substations, plus telecom, HVAC and civil work.Filing ↗
Receives distribution line work from Kyushu Electric Power and its grid subsidiary.Filing ↗
Work for Chubu Electric's group, including new distribution equipment, makes up about a third of sales.Filing ↗
Won planned transmission and distribution upgrades and trunk grid reinforcement work.Filing ↗
Receives mainly distribution line, power plant, transmission, substation and underground line work from its parents.Filing ↗
Won large trunk transmission line projects in Tohoku and Kanto, with orders of ¥9.3 billion and sales of ¥7.3 billion.Filing ↗
Note: we dropped six supported companies. Hokuriku Electric Power and Kyushu Electric Power are utilities that operate the grid, TESS Holdings builds energy equipment for factories and generates power, and Nippon Densetsu Kogyo is a railway electrical contractor that gets 48.1% of sales from East Japan Railway. Kondotec's electrical materials segment, which includes power receiving equipment, is 15.4% of sales, and Tomoe Corporation's transmission tower work is one part of its steel structures business, so the grid is not their main business. We added Sumitomo Electric, Fuji Electric and Kinden, which needed review but whose reports describe sales of power cables, substation equipment and distribution line work.
View detailed resultsThese results are from October 13, 2026. Qualitative judgments use the filings available at that time, while quantitative screening uses the latest financial data.
Here are companies often named as grid plays, with the sales share of their grid-related segment and their P/E, based on the share price at fiscal year-end. For reference, in Katana's data the median P/E is 14.7x for electrical equipment makers and 13.6x for all listed companies.
| Company | Grid-related segment | P/E |
|---|---|---|
| Nasu Denki-Tekko | Power and telecom 83% | 8.5x |
| Takaoka Toko | Power equipment 57% | 11.5x |
| Daihen | Energy management 54% | 18.9x |
| Meidensha | Power infrastructure 31% | 14.4x |
| Hitachi | Energy 30% | 25.3x |
| Aichi Electric | Power equipment 29% | 7.8x |
| Sumitomo Electric | Environment and energy 22% | 17.7x |
| Fujikura | Power systems 13% | 43.1x |
| NGK Insulators | Energy and industry 10% | 19.3x |
The more the grid is the core business, the lower the P/E. Takaoka Toko, with 57% of sales from power equipment, trades at 11.5x; Aichi Electric, at 29%, at 7.8x; and Nasu Denki-Tekko, with 83% from transmission and distribution materials and towers, at 8.5x, all below the electrical equipment median. Aichi Electric and Nasu Denki-Tekko also trade below book value. They take the transformer shortage at the core of their business, yet are not richly valued.
By contrast, Fujikura, with the highest P/E, is often counted as a grid play as one of Japan's big three cable makers. But power systems are 13% of its sales, and 55% comes from telecommunications such as optical fiber. Katana's judging also found counterevidence that the grid is its main business. Its valuation is better explained by optical communication (see our optical communication stocks example).
Not every transformer maker is cheap, though: Meidensha (14.4x) trades in line with its industry, and Daihen (18.9x) above it. It is the smaller companies with high grid shares that are not richly valued yet. P/E uses the share price at fiscal year-end and does not reflect price moves since then.
Complex theses, your own selection rules. Katana narrows companies with its own metrics, and AI reads annual reports to judge qualitative conditions. The selection you used to do one company at a time, AI now runs across the Japanese market.
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