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Updated: Nov 19, 2017

FIEM Industries :: Initiating Coverage

September 9, 2015 | PM Securities

Key Investment Rationale

Procurement of tenders floated by Energy Efficiency Services Ltd. (EESL):

Fiem has procured a total of 3 tenders pertaining to Supply of LED Bulbs(7W), self-ballasted LED Bulbs (9W), and LED Street Lights amounting to Rs.162 Cr. out of which one tender amounting to Rs. 11.53 Cr. was completed during FY15, whereas the remaining two tenders amounting to Rs.150.47 Cr. will be completed during current financial year. With a topline of Rs.825.3Cr. procurement of these tenders is a substantial growth driver for FY16. Also there is a probability of further procurement of more tenders floated by EESL, by FIEM.

New Ventures with Honda Locks, Toyota Tsusho Corporation and Yamato Industrial Co. Ltd, Japan:

In 2012 Fiem entered japanese market by supplying 2 wheeler lamps to Honda which has paved way for these new ventures That are a step ahead of Fiem’s legacy business of manufacturing lights for auto sector. These new ventures pertain to manufacturing Key Sets, Door Mirrors and Outside Handles for 4 & 2 wheelers for Honda and Toyota and Control Cables, Pipes , Resin Dies, Throttle Wires, Sensors & Switches etc. for Yamato Industrial Co. Ltd. Currently only about 4% of revenues is from Exports, while these ventures will further open up the scope for Fiem to grow in global markets.

Focusing on Indoor/Outdoor LED Luminaires and LED Integrated Passenger Information Systems: In India 120 Crore CFL’s and Incandescent bulbs (Excluding Tubelights and any other form of lighting) are sold every year for household purposes, Potentially all of these can be replaced by LED giving us an estimated market potential of 24000 Crs. (Assuming 200Rs/LED Bulb). And with about 300 Crore Street lights in the country the market potential for LED Street lights is about 50,000 Crores. Under EESL itself about 10Crore LED Bulbs and 30Lakh LED Street Lights are to be procured this year. Fiem is set to explore the huge LED Lighting opportunity in india and has already built a sizeable portfolio of LED Bulbs, Tubes, Down Lights, Street Lights, SOLar based Street lights etc. This Segment will cater to high volume Govt. requirements as well as high margin B2C Business in the years to come. Also LED PIS systems majorly find use in Railways besides other public transportation, with government allocating a total of 8,56,020 Cr for investment outlay in railways for the period 2015-2020, Spends on PIS Shall be a factor of growth for Fiem Industries.

Fiem’s Revenue & Net Profit has grown at a 4 year CAGR of 17.89% & 39.88% respectively:

With the regular course of auto ancillary business reporting a high CAGR, Fiem’s diversification into LED lighting can be a further growth driver in the years to come. In FY16 Public sector tenders shall contribute about 150Crs to the topline of Rs.825Crs. Going ahead the growth of LED segment in public as well as private sector can be huge, and may add up to fiem’s regular course of business, though as of now it is tough to quantify.

Cash Flows and Debt Repayment:

Fiem Industries, has been generating free cash flows since 2013 despite of continuous scaling up of manufacturing units, Free Cash flows stood at Rs. 25.9 Cr. in FY15, Which is expected to further grow to 51.6 Cr. FY17. Fiem Industries Debt-Equity Ratio has come down from 1.13:1 in FY13 to 0.52:1 in FY15 and further debt repayments are expected which shall bring down the ratio to about 0.3:1 by FY17. 

Key financials 

Company brief:

Fiem industries is one of the leading manufacturers of automotive lighting & signaling equipments and rear view mirrors. Their major business comes from the two-wheeler segment of the vehicle industry. Fiem’s product portfolio primarily comprises of a wide range of lighting systems and rear view mirrors, sheet metals parts, plastic components, head lamps, tail lamps, signalling lamp, roof lamps, wheel covers, warning triangle, complete rear fender assembly, frame assembly, mudguards, LED Display Panels and various sheet metal & plastic parts etc. 

Production units:

Revenue breakup:



This document has been prepared and compiled from reliable sources. While utmost care has been taken to ensure that the facts stated are accurate and opinions given are fair and reasonable, neither the Company nor any of its Directors, Officers or Employees shall in any way be responsible for the contents. The Company, its Directors, Officers or Employees may have a position or may otherwise be interested in the investment referred in this document. This is not an offer or solicitation to buy, sell or dispose off any securities mentioned in this document.

Pankaj Mangaldas Securities Pvt. Ltd.

701, P.J Towers Dalal Street, Fort, Mumbai - 400001

Ph: 25013733 Email: Website: 


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