Fiem Industries is one of the leading manufacturers of automotive lighting &signallingequipments 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 thirdquarter ended December 2016 fell 180 bps to 11.1%due to increased employee and other expenses. Raw material cost (as a % to sales, net of stock) fell 130 bps at 54.8%. Other expenses (% of sales net of stock) rose by 60 bps to 16.1%. Employee expenses rose 230 bps to 14.5%.

Thus the operating profit fell 22% to Rs 26.24crore. Other income stood 242% higher at Rs 2.02 crore. After 19% rise in depreciation cost to Rs 9.99 crore and 39% rise in interest expense to Rs 5.91 crore, PBT fell 42% at Rs 12.36 crore. After 42% drop in tax provision (12 bps drop in tax rate) at Rs 3.29 crore, net profit stood at Rs 9.07 crore against profit of Rs 15.67crore in previous corresponding quarter, a drop of 42%.

The company has made a turnover of Rs 20.32 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 December, 2016, drop of 25%.

Nine Month Performance:

Sales for first nine months ended December 2016 rose 11% at Rs 772.38 crore.

The OPM during the first nine months ended December 2016 fell by 40 bps to 12.1%due to increased employee and other expenses. Raw material cost (as a % to sales, net of stock) fell 160 bps at 55.6%. Other expenses (% of sales net of stock) rose by 40 bps to 15.97%. Employee expenses rose 120 bps to 13.8%.

Thus the operating profit rose 7% to Rs 93.6crore. Other income stood 98% higher at Rs 2.62 crore. After 20% rise in depreciation cost to Rs 29.06 crore and 67% rise in interest expense to Rs 17.76 crore, PBT fell 8% at Rs 49.39 crore. After 8% drop in tax provision (12 bps rise in tax rate) at Rs 14.78 crore, net profit stood at Rs 34.61 crore against profit of Rs 37.74 crore in previous corresponding period, a drop of 8%.

The company has made a turnover of Rs 59.12 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 nine months ended December, 2016, drop of 101% on qoq basis.

Shares of Fiem Industriesclosed 5% lower around Rs 992.3 at BSE on 14 February 2016, a day after earnings were announced.