[stock_ticker symbols=”FIEMIND” show=”name” static=”0″ nolink=”” duplicate=”1″ class=””]
14-Mar-2017 :Fiem Industries is one of the leading manufacturers of automotive lighting & signaling equipments and rear view mirrors. Its major business comes from the two-wheeler segment of the vehicle industry. Fiem Industries caters to both two wheeler and four wheeler segments. However, 94.5% of its revenue come from two wheeler segment, where as rest comes from four wheeler segment. 88.5% of its revenue comes from auto segment; where as 11.5% of its revenue comes from LED segment. Fiem Industries’ revenue mostly comes from domestic sale, export contributes only 3.6%.
Honda and TVS are the major clients of Fiem Industry. They contribute almost 70% of the auto revenue. Fiem Industries has nine plants all over India. It initially set up its first plant in Haryana (kundli). Later, they expanded to the other states namely Tamilnadu, Karnataka, Himachal Pradesh, Rajasthan and Gujarat. In 2016, they set up a plant in Gujarat for manufacturing automotive lights, plastic parts etc to supply to newly set up factory of Honda Motors. In 2016, the capacity of Tapukara, Rajasthan plant, which mainly manufactures plastic injection molded parts and led luminaries, has also been expanded.
In the last September, Fiem Industries raised Rs 120 crores through placement of equity shares to qualified institutional buyers. The company said that it would utilize the proceed to fund its international JVs and expand its existing automotive and LED facility. Recently Fiem has entered into a memorandum of understanding (MoU) with one of the leading Japanese company for setting up of facilities for developing moulds and tooling. To diversify its portfolio more towards four wheeler segment, Fiem has entered into a MoU with a Japanese lock, mirrors, handle bar switches manufacturer for setting up of manufacturing facilities.
To increase the market reach in the LED luminaries segment, they are also trying to extend footprint to Middle East and the African markets. In the domestic market, so far Fiem was concentrating mostly on the B2B segment. To increase the brand awareness and diversify the point of sale to B2C, they have recently executed a MoU with Su-Kam power systems limited for formation of a 50:50 joint venture pursuant to which they will market and sell their LED luminaries segment products under ‘Su-Kam Fiem’ brand in the retail market through the distribution channel of Su-Kam.
Fiem Industries financial growth is quite impressive. Its net turnover increased from Rs 4173 million in FY 11 to 9775 million in FY 16, a CAGR of 18.56%. In the same period, EBIDTA has seen a growth of 27% CAGR and net profit has grown at CAGR 39%.
In November in the last calendar year, due to demonetization, FIEM Industries has seen a de-growth in Q3 FY 2017. However, the recent economic data shows the economic growth is still intact with a bleak stats in the last quarter (Q3). It is expected that the two wheeler industry will perform well with growing per capita income and increase in number of middle class. It is expected that the sector will grow at a CAGR of 7% during the XII-th plan (2012-2017) and XIII-th plan (2017-2022).
Fiem Industry has seen constant rise in stock price and achieved a high of 1509.95 on 19th October. Thereafter it has seen a one-way slide towards Rs 850. We believe that it has near its bottom and can start its up-move anytime soon.
NSE Code : FIEMIND
BSE Code : 532768
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