Fiem Industries Limited — Q2 FY26 earnings call

Call held 13 Nov 2025

Management summary

Fiem Industries reported a strong Q2 FY26, achieving its highest-ever quarterly sales and PAT, driven by robust demand from key OEM customers like TVS, Royal Enfield, and Yamaha. The company saw its revenue grow by 17.12% YoY to INR 711.42 crores and PAT by 28.02% YoY to INR 63.78 crores, with EBITDA margin expanding to 13.93%. Fiem continues to expand its product offerings in both 2-wheeler and 4-wheeler segments, including advanced LED lighting and new technologies like adaptive and ambient lighting, while maintaining a focus on in-house R&D and localization.

Highlights

  • Q2 FY26 Revenue at INR 711.42 crores, up 17.12% YoY.

  • Q2 FY26 PAT at INR 63.78 crores, up 28.02% YoY.

  • Q2 FY26 EBITDA margin at 13.93%, compared to 13.21% in Q2 FY25.

  • H1 FY26 Revenue at INR 1,360.49 crores, up 15.19% YoY.

  • H1 FY26 PAT at INR 119.84 crores, up 21.01% YoY.

  • LED as a percentage of total lighting stands at 63.92%.

  • Capex for Q2 FY26 was INR 21.28 crores, with H1 FY26 total capex at INR 37.81 crores.

  • Royal Enfield contributes 6% to sales, with an expected uptick going forward.

Key financials

2 periods

Q2 FY26

  • Revenue
    ₹711.42 Cr
    YoY +17.1%
  • EBITDA
    ₹99.1 Cr
  • EBITDA Margin
    13.9%
  • PAT
    ₹63.78 Cr
    YoY +28%
  • Capex
    ₹21.28 Cr

H1 FY26

  • Revenue
    ₹1,360.49 Cr
    YoY +15.2%
  • EBITDA
    ₹186.46 Cr
  • EBITDA Margin
    13.7%
  • PAT
    ₹119.84 Cr
    YoY +21%
  • Capex
    ₹37.81 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

Profitability

  • EBITDA Margin Profitability · going forward · Medium confidence around 14%

    Previously 13-14% → around 14%

    We've generally guided more 13% to 14%, but we are hoping to work around the 14% mark going forward.

    — Management

Market Share

  • Royal Enfield Sales Contribution Market Share · going forward · Medium confidence uptick from 6%
    We expect that there could be an uptick on this 6% going forward.

    — Management

Revenue

  • Project Pipeline Revenue Revenue · in years to come · Medium confidence INR 1,000-1,200 crores
    we have more than 100 projects as of now that will be generating the revenue in years to come, maybe around INR1,000 crores to INR1,200 crores.

    — Management

  • H2 Performance Revenue · H2 FY26 · Low confidence better than H1
    But if you look at H2 and overall year, that's the direction we are talking about.

    — Management

Business Planning

  • 4-wheeler Business Clarity Business Planning · by end of this financial year · High confidence clearer picture
    by end of this financial year, we should be having a clearer picture on our business planning and we maintain that statement.

    — Management

Revenue Growth

  • Overall Revenue Growth Revenue Growth · FY27 · High confidence 15-20%
    given a guidance of 15% to 20% revenue growth, which we are maintaining. We would like to do that. For FY '27, right? That's right.

    — Management

Capex

  • Total Capex Capex · FY26 · High confidence INR 100 crores
    expect to do another INR50 crores to INR60 crores in the H2. So our capex for the current year should be INR100 crores.

    — Management

Headcount

  • R&D Team Size Headcount · as of now · High confidence more than 100
    We are odd 100 -- more than 100 numbers people as of now working in our R&D, especially in the electronics side, which is a core strength.

    — Management

Revenue Contribution

  • Hero Revenue Contribution Revenue Contribution · future · Low confidence at least 10%
    once the customer gets to at least a 10% of our revenue, that's when we can sort of give a more specific guidance. Right now, it's much lower than that.

    — Management

Volume

  • 2-wheeler Production Volume · full year · Medium confidence highest production year

    From COVID-high (2019-20) today

    structurally, if you look at the 2-wheeler industry, I think if you look at the full year, we feel that there is a high possibility that this will be the highest production year. We could surpass the COVID-high, which was hit back in 2019, '20.

    — Management

Risks & concerns

  • Supply chain disruption from Nexperia chip issues

    low

    Management stated they use multiple sources for discrete electronic items and communicate with customers, so no production hold-ups are expected due to Nexperia issues.

    Analyst downplayed

Areas of evasion (3)

  • Specific revenue/realization numbers for new high-tech products (e.g., TVS Norton)
  • Exact timelines for Hero's revenue contribution reaching 10%
  • Detailed strategy for 4-wheeler lighting expansion (citing early stage)

Q&A highlights

2 direct
Impact of fire incident on P&L and inventory write-off Direct
So just to clarify, there is a damage of inventory of INR21 crores and to the fixed asset INR28 crores. So the P&L you are referring actually, this entry has to first debit the P&L account. And then because we have an insurance policy that is fully valid. So it is -- the entry is reversed and it is shown in the recoverable... No, there is no impact on EBITDA. There is no impact.

Clarifies that despite a significant fire incident, the financial impact was mitigated by insurance and did not affect EBITDA, which is crucial for margin analysis.

Asked by Vijay Pandey

Sustainability of improved margins and future margin guidance Direct
So you're absolutely right. The margin has close to 14%-odd, which is a high target for us. So the number is driven by a product mix and also the fact that there is operating leverage now that is kicking in with the increased sales. So we do we are kind of now hoping to work more around this range. We've generally guided more 13% to 14%, but we are hoping to work around the 14% mark going forward.

Provides insight into the drivers of margin expansion (product mix, operating leverage) and sets a clear, albeit aspirational, target for future margin levels.

Asked by Aangi Sheth

Strategy and timeline for entering all 4-wheeler lighting segments (beyond current small parts) Partial
So, it's a little early to disclose this strategy, but we are fully committed to enter into all lamps of 4-wheelers, front lamp, rear lamp, bigger lamps, smaller lamps.

Indicates a significant strategic ambition to expand beyond current niche 4-wheeler products into the full range of lighting, which could be a major growth driver, despite the early stage of disclosure.

Asked by Saurabh

2 min read 6 chapters

Detailed narrative

Strong Q2 FY26 Performance Driven by Key OEMs

Fiem Industries delivered a robust Q2 FY26, achieving its highest-ever quarterly sales of INR 711.42 crores, marking a 17.12% year-on-year increase. Profit After Tax (PAT) also reached a record high of INR 63.78 crores, up 28.02% YoY. This strong performance was primarily fueled by significant demand from key OEM customers including TVS, Royal Enfield, and Yamaha, alongside new model launches such as the Hero Glamour X 125 and Xtreme models.

Margin Expansion and Operational Efficiency

The company's EBITDA margin expanded to 13.93% in Q2 FY26, up from 13.21% in the corresponding previous quarter. Management attributed this improvement to a favorable product mix and the realization of operating leverage from increased sales volumes. Fiem aims to sustain margins around the 14% mark going forward, supported by improved capacity utilization, which is now moving towards the 80s.

Strategic Expansion in 2-Wheeler and 4-Wheeler Lighting

Fiem is actively expanding its product portfolio, particularly in advanced lighting solutions. New launches include projector headlamps and winker lamps for Hero Glamour X 125 and Xtreme models. In the 4-wheeler segment, Fiem secured new businesses from Mahindra for high-mounted stop lamps for Bolero and Scorpio, and side repeater lamps for Bolero series, building on existing supplies for Scorpio and Thar. The company is fully committed to entering all lamps of 4-wheelers, including front, rear, bigger, and smaller lamps.

Focus on Advanced LED Technologies and R&D

The company is at the forefront of LED technology, with LED lighting constituting 63.92% of its total lighting business. Fiem is developing advanced animation and CAN-based system technology for headlamps and taillamps, notably for TVS Norton's new models for both global and Indian markets. An R&D team of over 100 people, primarily focused on electronics, is driving innovation, including the development of ambient and adaptive lighting solutions, with a proof-of-concept for ambient lighting already demonstrated to customers.

Positive Outlook and Capex Plans

Fiem maintains a positive outlook, guiding for a 15% to 20% revenue growth for FY27, expecting to outperform the industry. The company plans a total capex of INR 100 crores for the current fiscal year (FY26), with INR 37.81 crores already spent in H1 and an additional INR 50-60 crores planned for H2. This investment aims to ensure optimal capacity for the next 24 months and support the company's growth momentum.

Mitigated Fire Incident Impact and Supply Chain Resilience

Management clarified that a fire incident resulted in damage to inventory worth INR 21 crores and fixed assets worth INR 28 crores. However, due to a fully valid insurance policy, the financial impact was reversed and is shown as a recoverable asset, with no impact on EBITDA. Furthermore, Fiem addresses potential supply chain risks, such as chip shortages from Nexperia, by working with multiple sources for electronic components, ensuring no production hold-ups are expected.

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