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. It also manufactures metals parts and plastic components for two and four wheelers.

Its diversified products portfolio ranging from rear view mirrors, head lamps, tail lamps, signalling lamp, roof lamps, wheel covers, warning triangle, complete rear fender assembly, frame assembly, mudguards, LED Display Panels and various sheet metal & plastic parts etc. is capable of catering to the needs of almost all segments of automobile industry viz., four-wheelers, LCVs, HTVs and tractors.

Around 71% of sales come from Lighting and Signaling Equipments and close to 13% comes from the Rear View Mirrors. Plastic Moulded Parts is the third biggest product line with 10% share in sales.

Annual Performance

For the year ended March 2014, the company has posted 19% rise in total income from operations at Rs 718.41 crore. Margins rose by 70 bps to 12.3% as against 11.6% in the previous year. Operating profit jumped by 27% to Rs 88.5 crore.

During the year, raw material as % of sales net of stock adjustment has declined 160 bps to 57.6%. Other expenses fell by 70 bps to 15.2%. Employee expenses were steady at 11.8%.

Aided by almost double other income at Rs 67 lakh, PBIDT rose by 27% to Rs 89.1 crore. Interest cost rose by 12% to Rs 14.44 crore and depreciation rose 19% to Rs 21.78 crore. Thereafter, PBT rose by a huge 36% at Rs 52.92 crore. After accounting 54 bps drop in the effective tax rate at 29.33% (33% rise in total tax provision), Net Profit rose by 37% at Rs 37.4 crore during the year.

While the company will continue to solidify its position in auto-component business by judiciously seizing the strategic growth opportunities and expanding its product portfolio, it has gone in for diversification since last year for manufacturing of LED Luminaries for indoor and outdoor applications such as Recess Panels, down lights, spot lights, LED Bulbs & LED Tribe Lights, Bay Lights, Flood Lights, Solar based Lantern and Street lights etc.

Quarterly Performance

For the fourth quarter ended March 2014, the company has posted 20% rise in total income from operations at Rs 199.17 crore. Margins rose by 110 bps to 13% as against 11.9% in the previous corresponding quarter. Operating profit jumped by 32% to Rs 25.8 crore.

There was reduction in cost on all fronts. For the quarter, raw material as % of sales net of stock adjustment has declined 380 bps to 55.4%. Other expenses fell by 50 bps to 14.7%. Employee expenses rose 5 bps to 11.35%.

With other expenses at Rs 13 lakh (vis a vis Rs 9 lakh income), PBIDT rose by 30% to Rs 25.67 crore. Interest cost rose four times to Rs 3.39 crore and depreciation rose 16% to Rs 5.79 crore. Thereafter, PBT rose by 20% at Rs 16.49 crore. After accounting 470 bps drop in the effective tax rate at 27.3% (2% rise in total tax provision), Net Profit rose by 28% at Rs 11.99 crore during the quarter.

Other Information:

• The promoters share holding in the company stands unchanged at 69.96% in quarter ended Mar 14. Promoters have pledged nil shares in the company.

• The company announced its result on 28 May 2014. The stock closed marginally higher at Rs 445.25 after hitting a high of Rs 456 earlier on that day at BSE.