Fiem Industries Limited — Q3 FY26 earnings call

Call held 12 Feb 2026

Management summary

Fiem Industries reported a strong Q3 FY26, driven by robust 2-wheeler industry recovery and enhanced operational efficiencies, leading to record EBITDA margins. The company is actively investing in advanced lighting technologies, expanding its 4-wheeler business, and implementing green energy initiatives, while maintaining a positive outlook for future growth and profitability.

Highlights

  • Revenue for Q3 FY26 grew by 16.22% YoY to INR685.81 crores.

  • EBITDA margin for Q3 FY26 reached an all-time high of 14.25%, up from 13.2% YoY.

  • PAT for Q3 FY26 increased by 33.83% YoY to INR63.45 crores.

  • 9M FY26 Revenue grew by 15.54% YoY to INR2,046.3 crores.

  • 9M FY26 EBITDA margin was 13.89%, up from 13.38% YoY.

  • 9M FY26 PAT increased by 25.16% YoY to INR183.29 crores.

  • Total Capex for 9M FY26 was INR78.83 crores, with INR41.02 crores in Q3.

  • The company targets a '14% plus EBITDA margin' in the future.

Key financials

3 periods

Headline

  • Cash Level (Dec 31, 2025)
    ₹222 Cr

Q3 FY26

  • Revenue
    ₹685.81 Cr
    YoY +16.2%
  • EBITDA Margin
    14.3%
  • PAT
    ₹63.45 Cr
    YoY +33.8%

9M FY26

  • Revenue
    ₹2,046.3 Cr
    YoY +15.5%
  • EBITDA Margin
    13.9%
  • PAT
    ₹183.29 Cr
    YoY +25.2%
  • Capex
    ₹78.83 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 · future · High confidence 14% plus
    we believe that we should ideally be at 14% plus EBITDA margin in future as well. That's the kind of target we are setting for ourselves.

    — Management

Capex

  • Total Capex Capex · FY26 · High confidence INR100 crores
    This year will be INR100 crores for FY '26.

    — Management

  • Total Capex Capex · next 24 months · High confidence upwards of INR200 crores
    And for the next 2 years, we think it could be upwards of INR200 crores, around INR200-odd crores... Total for the next 24 months.

    — Management

Revenue

  • Revenue Growth Revenue · next 12 to 24 months · Medium confidence 15% to 20%
    Over the next 12 to 24 months, we continue to guide with our initial guidance, just 15% to 20% growth.

    — Management

4-Wheeler Business

  • Business Plan & Revenue Impact 4-Wheeler Business · May next year (next investor meet) · Medium confidence to be shared
    in the next investor meet, which would be in May next year, when we close this financial year, we'll be sharing you a business plan and the revenue impact that the 4-wheeler is going to make in future.

    — Management

New Business

  • Mercedes RFQ process development time New Business · after RFQs in next financial year · Medium confidence 18 months to 2 years
    we are expecting certain RFQs to come in this -- in the next financial year. And then, it is -- their process development time is around 18 months to 2 years with Mercedes.

    — Management

  • Norton supplies mass production start New Business · next 3 months · High confidence in a couple of months / next 3 months' time
    Norton, as of now, it is being launched, and mass production will start in a couple of months... might be in next 3 months' time, we'll be in a position to start our supplies from here to Norton U.K. and to TVSM India, too.

    — Management

Green Energy

  • Rooftop solar implementation time Green Energy · ongoing · High confidence 4 to 6 months
    This rooftop, we will be implementing. So it is -- it takes around 4 to 6 months' time, depending upon the capacity.

    — Management

  • Open access energy implementation time Green Energy · ongoing · High confidence 1 month or 2 months
    And the open access is very short timer. So it is around -- 1 month or 2 months' time, we...

    — Management

Risks & concerns

  • Recurring fire incidents at manufacturing units.

    medium

    Two fire incidents in two years, management states corrective actions (external risk assessment, internal audits) are in place, and insurance claims are being processed (INR50 crores received for Unit 7, INR82.30 crores claim filed for Unit 8).

    Analyst acknowledged

  • Competitive intensity and potential market share loss in 2-wheeler segments.

    medium

    Analyst questioned lower growth compared to competitor Lumax, management attributed it to model mix and the competitor's larger 4-wheeler business, asserting market share with Honda remains the same.

    Analyst downplayed

  • Long development and commercialization timelines for new 4-wheeler projects (e.g., Mercedes).

    medium

    Management stated that while Mercedes approval is a foothold, the process development time is around 18 months to 2 years after RFQs are received in the next financial year.

    Management acknowledged

Areas of evasion (3)

  • Specific competitor growth comparison
  • Precise quantification of one-off escalations
  • Exact timeline for 'meaningful' 4-wheeler revenue impact

Q&A highlights

2 direct
Recurring fire incidents, root causes, corrective measures, and insurance claims. Direct
Rai plant, whatever fire incident has happened, happened because of short circuit... for the Unit 7, that is the Rai unit, we already received around INR50 crores... for the Unit 8... we already filed, on January 30, INR82.30 crores insurance claim on reinstatement basis.

Addresses recurring operational safety concerns and provides updates on financial recovery from incidents, indicating potential impact on future insurance terms or safety audits.

Asked by CA Garvit Goyal

Timeline for meaningful revenue contribution from the 4-wheeler segment and how orders are catered. Partial
we are catering the 4-wheeler orders from our existing facilities only at this moment... in the next investor meet, which would be in May next year, when we close this financial year, we'll be sharing you a business plan and the revenue impact that the 4-wheeler is going to make in future.

Clarifies the current operational strategy for the 4-wheeler business and defers specific financial impact timelines, suggesting it's still in early stages of significant revenue contribution.

Asked by Garvit Goyal

Sustainability of gross margin improvement and comparison of growth rates with competitors. Direct
The margins are as we mentioned, are at an all-time high for us at 14.25% at the EBITDA level. It's driven by a number of factors. There is operating leverage kicking in. There is improved efficiency... product mix, but also we also got some escalations during the quarter... we should ideally be at 14% plus EBITDA margin in future as well.

Explains the drivers behind the record margins and sets a clear future margin target, while also addressing competitive landscape by attributing differences to model mix rather than market share loss.

Asked by Anubhav

3 min read 8 chapters

Detailed narrative

Q3 FY26 Financial Performance Overview

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.

Nine-Month FY26 Performance

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.

Operational Efficiency and Margin Expansion

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.

Strategic Focus on 4-Wheeler Segment

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.

Innovation and Technology Investments

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.

Capital Allocation and Future Capex

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.

Green Energy Initiatives

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.

Safety Measures and Insurance Claims

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.

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