Fiem Industries Limited — Q1 FY26 earnings call

Call held 14 Aug 2025

Management summary

Fiem Industries delivered a strong Q1 FY26, driven by robust demand from key OEM customers and a growing LED lighting segment. The company reported double-digit growth in both sales and PAT, alongside strategic investments in technology and capacity expansion. Management expressed confidence in the industry's growth potential and Fiem's position to capitalize on it, despite minor macroeconomic headwinds.

Highlights

  • Sales grew 13.16% YoY to ₹649.07 crores in Q1 FY26.

  • PAT increased 13.92% YoY to ₹56.05 crores in Q1 FY26.

  • EBITDA for Q1 FY26 was ₹87.36 crores, with a margin of 13.46%.

  • LED lighting contributed 63.92% to total automotive lighting sales.

  • Company made a CAPEX of ₹16.53 crores during the quarter.

  • Cash balance stood at ₹341 crores at the end of the quarter.

  • Secured development orders for three additional products from Force Motors, marking entry into the four-wheeler segment.

  • Planning to add another 10 SMT lines over the next one year.

Key financials

  1. Revenue ₹649.07 Cr +13.2%YoY
  2. PAT ₹56.05 Cr +13.9%YoY
  3. EBITDA ₹87.36 Cr
  4. EBITDA Margin 13.5%
  5. CAPEX ₹16.53 Cr
  6. Cash Balance ₹341 Cr

What they filed

Q1 FY27: revenue up 17.6%, net profit up 12.1% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue612 593 639 659 715 +17%690 +16%751 +18%775 +18%
EBITDA81 78 85 89 99 +22%98 +26%110 +29%104 +17%
Net profit50 47 59 58 64 +28%63 +34%71 +20%65 +12%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Guidance & targets

Sales

  • Sales Growth Sales · FY26 / next 3-5 years · Medium confidence 15% to 20%
    See, organically, we have always maintained that we will grow at 15% to 20%. That is the benchmark that we have set for ourselves.

    — Management

Capacity

  • SMT Lines Addition Capacity · next one year · High confidence 10
    We have 10 SMT lines in our company and we are planning for another 10 machines in next one year.

    — Management

  • Revenue for independent four-wheeler plant Capacity · High confidence ₹200 crores
    So, normally a plant is viable at a revenue of around Rs. 200 crores

    — Management

Capex

  • Total CAPEX Capex · current year · Medium confidence ₹75-100 crores
    See, the total CAPEX, if I was to highlight for the current year is around Rs. 75 crores to Rs. 100 crores.

    — Management

  • CAPEX Plan (excluding four-wheeler) Capex · next three years · High confidence ₹200 crores
    No, the CAPEX plan of Rs. 200 crores over next three years excluding anything that we do for four-wheeler remains intact.

    — Management

Market Share

  • LED Share in Total Sales Market Share · over the next couple of years · High confidence 75% - 80%
    we believe that this number should gradually move up 75% - 80% over the next couple of years and that will drive this revenue growth

    — Management

Product Launch

  • Hero 125cc New LED Model Launch Product Launch · in a couple of months · Medium confidence soon, might be in a couple of months
    This will be a new model launch which will be soon, might be in a couple of months, it will be launched in upcoming models.

    — Management

Risks & concerns

  • Recent imposition of steep U.S. tariff (up to 50% on Indian export).

    low

    Management stated Fiem remains unaffected as its business with the US is marginal and contract terms are FOB, shifting tariff burden to the customer.

    Management downplayed

  • Geopolitical issues and 'magnet issue' impacting growth.

    low

    Management stated that structurally, the company is fine and not seeing any challenges on the ground despite these issues.

    Analyst acknowledged

  • Negative consumer sentiments due to global headwinds.

    low

    Management observed robust demand on the ground, good monsoon, and positive sentiment, citing India's strong economic fundamentals.

    Analyst downplayed

  • Supply chain issues related to rare earth metals or importing glasses for LED lights.

    low

    Management stated no impact from rare earth metals (due to small EV component) and clarified they use polycarbonate/PMMA, not glass, for lamps, making the glass concern outdated.

    Analyst not addressed

Areas of evasion (2)

  • Specific product details for new four-wheeler orders (Force Motors, RFQs)
  • Precise wallet share figures due to model complexity

Q&A highlights

2 direct
HMSI growth and potential market share loss to competitors. Partial
No, we have not lost any share from HMSI. And wherever there are few products which are already in development as of now at our end, will be launched during next year.

Analyst challenged management on perceived underperformance with a key customer (HMSI) compared to competitors, probing for potential market share loss, which management denied while acknowledging ongoing product development.

Asked by Shubham Sehgal

Impact of recent US tariffs on Fiem's business, both direct and indirect. Direct
No, our direct or indirect order book is not intended to America at all. The American lighting systems that eventually end up in America is very insignificant what I highlighted.

Addresses a significant macroeconomic risk (US tariffs) and clarifies the company's limited exposure, reassuring investors about its business model and contract terms.

Asked by Garvit Goyal

Discrepancy between Yamaha's global sales feedback (weaker) and Fiem's reported Q1 growth with Yamaha. Direct
So, our Yamaha sale in Q1 as compared to Q1 of last year, is almost up 20%. So, for us, there is an industry decline in domestic that you are talking about. But we have not seen that. We are, in fact, ramping up sales from Yamaha.

Clarifies a potential contradiction between general market sentiment for a key OEM and Fiem's specific performance, suggesting market share gains or product mix benefits for Fiem.

Asked by Vijay Pandey

3 min read 7 chapters

Detailed narrative

Q1 FY26 Financial Performance Overview

Fiem Industries reported a strong Q1 FY26, with sales growing 13.16% year-over-year to ₹649.07 crores, up from ₹573.61 crores in Q1 FY25. Net Profit (PAT) also saw a significant increase of 13.92% to ₹56.05 crores, compared to ₹49.2 crores in the previous year. EBITDA stood at ₹87.36 crores, translating to an EBITDA margin of 13.46%, a slight decrease from 13.73% in Q1 FY25.

LED Lighting Dominance and Future Expansion

LED lighting continues to be a key growth driver, contributing 63.92% to total automotive lighting sales in Q1 FY26, and is expected to increase to 75-80% over the next couple of years. To support this growth, the company plans to add another 10 SMT (Surface Mount Technology) lines within the next one year, building on its existing 10 SMT lines. This expansion underscores Fiem's commitment to capitalizing on the shift towards LED technology in the automotive sector.

Four-Wheeler Segment Entry and Strategy

Fiem has successfully entered the four-wheeler segment, securing development orders for three additional products from Force Motors. The company's strategy involves a three-pillar approach focusing on new technology, current models (e.g., Mahindra Bolero), and standard products applicable to various models. Management indicated that an independent plant for four-wheeler operations would be viable at approximately ₹200 crores in revenue, with initial growth served from existing facilities.

Technology Investments: EMC/EMI Laboratory

A significant investment is being made in a state-of-the-art EMC/EMI electronic validation laboratory, which is currently under installation. This facility, touted as the first of its kind in the Indian automotive lighting industry, will integrate mechanical, optical, and electronic capabilities. This investment is expected to strengthen Fiem's technological edge and leadership in performance and quality as lighting increasingly integrates with electronics.

Capex and Cash Position

During Q1 FY26, Fiem incurred a CAPEX of ₹16.53 crores. The company's total CAPEX plan for the current year is projected to be between ₹75 crores and ₹100 crores, encompassing new facilities and SMT lines. A broader CAPEX plan of ₹200 crores over the next three years (excluding four-wheeler specific investments) remains intact, indicating sustained investment in growth. The company maintained a healthy cash balance of ₹341 crores at the end of the quarter.

Customer Performance and Market Outlook

Fiem reported robust demand from key OEM customers like TVS, Royal Enfield, and Yamaha, which fueled significant growth. Yamaha sales, in particular, were up almost 20% in Q1 FY26 compared to the previous year, despite general industry declines. The company is also working on new projects with Hero, including a new LED model launch in the 125cc segment expected in a couple of months. Management expressed confidence in India's economic fundamentals and a healthy rebound in the two-wheeler industry, especially with the upcoming festive season.

Other Operating Income

Other operating income saw a jump to ₹9 crores in Q1 FY26, up from the usual ₹4-5 crores. Management clarified that this increase included a one-off ₹4 crore design fee for specific projects, which is typically excluded when reporting EBITDA margins. The regular income components include testing fees and scrap sales.

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