Japanese electric motor maker Nidec raised its full-year operating profit forecast by 4.3% on Tuesday off the back of a recovery in demand for hard drive motors amid efforts to raise its profitability and a weaker yen.

The company raised its expectations for operating profit in the financial year to the end of March 2025 to ¥240 billion ($1.53 billion), versus an earlier forecast of ¥230 billion and an average analyst view of ¥246.9 billion.

Operating profit for the April-June quarter totaled ¥60.3 billion, largely in line with ¥60.2 billion in the same period a year earlier and compared with the average estimate of ¥58.4 billion in a survey of four analysts by LSEG.

"Nidec expects rapid demand expansion of power generators which are essential to data centers," the company said in a statement.

It said it saw demand for hard drive disk motors recovering and that for water-cooling modules for artificial intelligence expanding rapidly.

The company said last month its business in water-cooling modules for generative AI data centers could expand to ¥1 trillion in sales in the future.

Nidec separately announced it signed a memorandum of understanding on Monday with Tata Elxsi, an Indian technology service provider, to develop software programs for India and other markets.

Previously, the company made a big bet on components for electric vehicles, but has been facing headwinds in that market in recent months due to demand uncertainty and heavy price competition in China.

Nidec reported the results after it revised down its operating profit for the financial year ended in March 2024 and the one before that after determining that some sales were "recorded in an inflated manner" at a subsidiary.