Fiem Industries Limited

Fiem Industries reported a strong Q3 FY26, with revenue growing by 16.22% year-on-year to INR685.81 crores, up from INR590.1 crores in Q3 FY25. This performance was supported by a broad-based recovery in the 2-wheeler industry, which saw production growth of 15% year-on-year. The company achieved an all-time high EBITDA margin of 14.25% (INR97.7 crores), a significant improvement from 13.2% (INR77.88 crores) in the prior year. Net Profit After Tax (PAT) also saw a substantial increase of 33.83% to INR63.45 crores.

For the first nine months of FY26, the company's sales reached INR2,046.3 crores, marking a 15.54% increase compared to INR1,771.15 crores in the corresponding period of the previous year. EBITDA for 9M FY26 stood at INR284.16 crores, translating to an EBITDA margin of 13.89%, up from 13.38% in 9M FY25. PAT for the nine-month period was INR183.29 crores, a 25.16% increase over INR146.44 crores in 9M FY25.

The significant improvement in EBITDA margin to 14.25% in Q3 FY26 was attributed to several factors, including operating leverage, improved efficiencies from factory drives, a favorable product mix, and some escalations received during the quarter. Management expressed confidence in sustaining these margins, targeting '14% plus EBITDA margin in future as well' by continuing efficiency improvements.

Fiem Industries is actively expanding its presence in the 4-wheeler segment, currently supplying products like number plate lamps, rear reflectors, and fog lamps to Mahindra & Mahindra, with high mount stop lamps under development. The company is catering to 4-wheeler orders from existing facilities and plans to share a detailed business plan and revenue impact for this segment in the next investor meet in May next year. They are also in final stages of RFQs with Mahindra and have been approved as a potential global supplier for small lamps to Mercedes after multiple plant visits.

The company continues to invest in advanced lighting and electronic technologies, including laser systems, touch interfaces, adaptive drive beams, and metric lighting solutions. A state-of-the-art EMC and EMI laboratory in Gurgaon has commenced trials and product validation, strengthening in-house testing capabilities. This focus aims to enable participation in higher-value lighting solutions and increase electronic content per vehicle, which varies from 30% to 80% product-wise.

Fiem Industries incurred a capex of INR41.02 crores in Q3 FY26, bringing the total for 9M FY26 to INR78.83 crores. The company projects a total capex of INR100 crores for FY26 and anticipates spending 'upwards of INR200 crores' over the next 24 months for existing projects and 4-wheeler segment expansion. With a cash level of INR222 crores as of December 31, management is well-positioned for organic and inorganic growth opportunities.

As part of its commitment to sustainable manufacturing, Fiem is rolling out renewable energy projects across its plants, including rooftop solar and open access wind energy. Rooftop solar installations are expected to take 4 to 6 months, while open access initiatives could be commissioned within 1 to 2 months. These initiatives are aimed at reducing energy costs, improving operational efficiency, and moving towards becoming a carbon-neutral company.

Following two fire incidents at its Rai and Tapukara units, management confirmed that external risk assessment agencies are involved, and safety measures are being continuously audited by a third party and internal teams. The Rai plant incident was attributed to a short circuit. The company has received INR50 crores for Unit 7 (Rai) and filed an INR82.30 crores insurance claim for Unit 8 (Tapukara) on a reinstatement basis, with assessments ongoing. Management emphasized no injuries or loss of business occurred due to these events.