Fiem Industries

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 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.

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.

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.

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.

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 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.