Fiem Industries is one of the leading manufacturers of automotive lighting & signalling 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.

Quarter Performance

The OPM during the third quarter ended March 2016 rose by 70 bps to 13.7% due to decreased raw material expenses. Raw material cost (as a % to sales, net of stock) fell 370 bps at 51.5%. Other expenses (% of sales net of stock) rose by 220 bps to 17.8%. Employee expenses rose 130 bps to 12.9%.

Thus the operating profit rose 31% to Rs 39.65 crore. The company incurred a loss of Rs 35 lakh at the other income level vis a vis a gain of Rs 1lakh in the previous corresponding year. After 14% rise in depreciation cost to Rs 8.79 crore and 62% rise in interest expense to Rs 5.12 crore, PBT rose 31% at Rs 25.39 crore. After 1% rise in tax provision (710 bps drop in tax rate) at Rs 5.9 crore, net profit stood at Rs 19.45 crore against profit of Rs 13.42 crore in previous corresponding quarter, a rise of 45%.

The company has made a turnover of Rs 62.09 crore in LED Luminaries segment comprising of LED Luminaries i.e indoor and outdoor lighting, display panels and LED Integrated Passenger Information Systems etc. during the quarter ended March, 2016.

Full Year Performance

Topline and bottomline for the year ended March 2016 increased by 20% and 35% to Rs 987 crore and Rs 57.2 crore respectively.

The OPM during year rose 50 bps at 12.9%. Raw material cost (as a % to sales, net of stock) fell 200 bps at 55.6%. Other expenses (% of sales net of stock) rose by 90 bps to 16.2%. Employee expenses also rose 90 bps to 12.8%.

Thus the operating profit rose 24% to Rs 127 crore. Other income registered 8% increase to Rs 97 lakh vis a vis Rs 90 lakh. After 8% rise in depreciation cost to Rs 33.03 crore and 31% rise in interest expense to Rs 15.77 crore, PBT rose 31% at Rs 79.17 crore. After 19% rise in tax provision (260 bps drop in tax rate) at Rs 27.7 crore, net profit stood at Rs 57.2 crore against net profit of Rs 42.26 crore in previous year, a rise of 35%.

88% of revenues for the year was from automotive segment (automotive lighting & signalling equipment, plastic moulded and rear view mirrors) while rest 12% was from LED Luminaries segment (Indoor and outdoor lighting, LED Integrated Passenger Information Systems, LED Display Panels). EBITDA margin in automotive segment was app 12.5% while in LED segment, it was 16.6%.

The newly set up unit of the company at Ahmedabad, Gujrat has started commercial production/supply wef 11 Jan 2016. Total investment for this unit as of March 2016 was Rs 46 crore.

Shares of Fiem Industries are currently trading around Rs 825 at BSE.