Fiem Industries Limited — Q4 FY25 earnings call

So first, this breakup of last financial year, INR58 crores is which we incurred in the Rai Plant and balances all other facilities, including the R&D equipments we have had... Yes, the go-forward capex for the next 3 years is approximately INR200 crores. And that is -- that doesn't include the 4-wheeler capex that might happen, which also is a significant figure. But outside of 4-wheeler, our capex plan should be around INR200 crores over 3 years.

Provides specific details on past and future capital expenditure, differentiating between 2-wheeler and potential 4-wheeler investments.

Asked by Viraj (SiMPL)

First is that for the LED, our EBITDA margins are broadly the same. They are not different as far as LED component is concerned. The other -- but there is operating leverage that kicks in with higher revenues for sure. But also, you must appreciate that we are making a lot of investments... our margins are still on a positive trajectory, but we do not expect this to be materially higher over the next couple of years because we continue to make investments for growth.

Addresses analyst's concern about why margins haven't expanded more given higher LED realization, explaining investments for growth are offsetting immediate margin expansion.

Asked by Viraj (SiMPL)

See, I'm Rajesh here. So as of now, whatever communication about rare earth minerals, whatever is being highlighted from the Chinese Government and Indian Government. The impact in EV market is not much because as of now, the overall share is up 5% only... So there is not much of impact because of these rare earth chemicals.

Clarifies that current supply chain issues for rare earth minerals have minimal impact on the company due to the small overall share of the EV market.

Asked by Garvit Goyal (Nvest Analytics)

Neither do we have any concerns nor can we disclose such information, which is confidential with clients, and we have no concerns.

Analyst raises a potential credit risk with a key customer, but management declines to provide specific details, citing confidentiality.

Asked by Garvit Goyal (Nvest Analytics)

I think we've demonstrated even in a bad year, and you've seen in the last 5 years, there have been many negative cycles. Even in the worst year, we have grown well, driven by our very diversified both product mix, as well as customer mix, including our export customers. So we are not dependent on a product or a customer. So at a holistic level, we continue to guide for a 15% - 20% growth even in the worst bad markets.

Management reiterates confidence in achieving strong growth despite market conditions and a higher base, citing diversification.

Asked by Garvit Goyal (Nvest Analytics)

No. So Gogoro, we updated last quarter as well. Gogoro is facing a lot of headwinds at the global level, and because of which their Indian sort of plans and venture is on hold. I think there is a new management there at the head office level. So they are reviewing. They are figuring out their financials. So as of now, this is on hold and we will update you as we get a more detailed update with the new management.

Provides an update on a previously discussed strategic partnership, indicating it's currently on hold due to external factors.

Asked by Karan (Keynote Capitals)

Yes. So let's break this down. First of all, PAT and capex, keep it separate. You're saying if you made a capex of INR140 crores, what's the benefit we see. I think as we highlighted, our asset turnover is around between 2 to 2.5. So obviously, we expect incremental revenues accruing around those levels and which will translate into sort of PAT. But sometimes, you cannot see it linearly over 1 year that you put INR140 crores, what is the next year turnover increase and what is the PAT. These are all forward-looking stuff where we think through over the 3- to 5-year plan, and they give you results.

Analyst seeks clarity on the immediate returns from capex, and management explains that benefits are realized over a longer 3-5 year horizon, linked to asset turnover.

Asked by Dharmesh Shah (Individual Investor)

Yes, that's a good question. Yes, the development was successful. Our samples -- final samples have gone to the customer. They have now been fitted in De Tomaso car. The car has been showcased very recently... So the project has gone very successfully so far. And once the customer approves everything, then we will supply them the lamps that they require... What we are developing for Mercedes is also tooled-up samples, but for their prototype car, which is low volume. So this is basically a stage for future developments because we are associated with a company like Mercedes.

Confirms successful progress on high-profile European OEM projects, indicating future revenue potential and strengthening technical capabilities.

Asked by Anubhav Mukherjee (Prescient Capital)