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Fiem Industries Limited Q4/FY24 Earnings Call Summary
Key Financial Highlights • Record Sales: Exceeded INR 2,000 crores for FY24. • Net Profit: INR 166 crores for FY24. • Dividend: Recommended INR 20 per share.
Capital Expenditure Plans • Investment: INR 250-300 crores over the next three years. • Focus Areas: Enhancing capacity, expanding into the 4-wheeler market, and supporting new projects.
Operational Insights • 2-Wheeler Industry Growth: Strong contributions from major OEMs. • Concerns: Delays in the Gogoro project affecting revenue. • New Vehicle Development: A competitively priced vehicle expected to generate revenue in FY25.
Innovation and Growth Projections • Ongoing Projects: Lighting technology advancements (laser, night vision, ambient lighting). • Organic Growth Expectation: 12-15% for FY25. • Capacity Utilization: Currently around 80%, with confidence in meeting future demands.
Market and Segment Performance • Two-Wheeler Segment: Underperformance compared to competitors; broader yearly trend analysis suggested. • Gross Margin Decline: Year-on-year decline of 200 basis points attributed to increased manpower costs.
Future Opportunities • Replacement Business Growth: Healthy growth reaching INR 141 crores. • Ambient Mood Lighting Market: Potential opportunity of INR 500 to 1000 crores over the next 3-5 years.
Customer and Project Updates • OEM Collaborations: Three customers with a project expected to start production soon. • Yamaha Production Shift: Anticipated benefits from Yamaha moving production to India.
Conclusion • Revenue Aspirations: Optimism expressed, but no specific guidance provided. • Growth Rate Projections: 8-10% growth for two-wheeler OEMs; increasing LED mix in automotive lighting expected to enhance margins.
Fiem Industries Limited Q3 FY2024 Earnings Call Summary
Earnings Performance • Date of Call: February 12, 2024 • Net Sales: Increased by 10.3% to Rs. 483 Crores • Profit After Tax (PAT): Rose by 26% to Rs. 40 Crores year-on-year
Market Outlook • Indian Economy Growth: Projected at 7.3% • Demand: Strong in two-wheeler and electric vehicle markets
Key Developments • New Order: Secured significant order for full LED headlamps for a high-end European car • Bonus Share Announcement: 1:1 bonus share to enhance shareholder value
Product Launches and Innovations • New ZXR Model: Transitioning from Class B to Class D for domestic and export markets • LED Products: Account for 51% of new orders, with a target to increase to 65-70%
Management Insights • Revenue Growth: Clarified that growth is in value terms, not volume • Sonepat Power Plant: No capacity constraints reported • Plastic Product Segment: Flat growth due to softening raw material costs
Market Strategy • Four-Wheeler Segment: Emphasis on establishing infrastructure for complex product development • Electric Vehicle Market: Partnership with Gogoro for hub motors and motor controllers
Future Outlook • Growth in Two-Wheeler Industry: Optimistic for FY2025 • LED Market Share Target: 65-70% within two to three years
Partnerships and Collaborations • Existing Relationships: Ongoing partnerships with electric two-wheeler OEMs like TVS and Ola • New Developments: Collaborations with Toyo Denso for new products
Localization and Production • Localization: Over 75% of products to be localized • Production Timeline: Hub motors and motor controllers production expected to start in Q1 next year
Conclusion • Call Closure: Moderator thanked participants; management expressed gratitude and encouraged further questions.
Fiem Industries Limited Q2 FY24 Earnings Call Summary
Earnings Performance • Date of Call: November 9, 2023 • Net Sales: INR 506 crores • EBITDA: INR 66.4 crores • Profit After Tax (PAT): INR 42 crores (15% sequential increase)
Segment Performance • Two-Wheeler Segment: • Production volume: 5.6 million units • Electric Vehicle (EV) Segment: • 23% year-on-year increase in volumes
Management Outlook • Optimism for the second half of FY24 due to: • Festive demand • New product launches • Planned capital expenditure (capex): Approximately INR 100 crores
Q&A Highlights • Margin Differences: • Difficulty in comparing two-wheeler and passenger vehicle (PV) segments due to minimal PV business. • Growth Expectations: • Management optimistic about achieving growth but refrained from specific commitments. • Domestic Demand: • Positive trend anticipated in two-wheeler demand over the next 12-18 months. • LED Revenue: • Strong share in automotive lighting; fluctuations attributed to customer demand, not market share loss. • Capex Plans: • Current capex mainly for replacing machinery damaged in a fire, covered by insurance.
Management Changes • Promotion of existing directors to Joint Managing Directors. • Appointment of a CEO focused on four-wheelers.
Sales and Market Insights • Yamaha Sales Decline: Attributed to European market slowdown; domestic sales expected to improve. • HMSI Sales: Slight decline but stable market share. • Collaborations: Ongoing projects with Hero Motocorp for new models.
Shareholder Considerations • Discussion of a potential share buyback to reward shareholders.
Product Development • Development of six new models for Hero, entirely new rather than existing brands. • Stable pricing in auto LED lighting despite technological advancements.
Global Opportunities • Pursuing partnerships with European and American OEMs (e.g., Piaggio, Harley Davidson). • Discussions for product diversification with Toyo Denso for various sensors.
Conclusion • Management expressed gratitude to participants and wished them a happy Diwali.
Fiem Industries Limited Q1 FY24 Earnings Call Summary
Key Financial Highlights • Net Sales: INR 471 crore • EBITDA: INR 62 crore • PAT: INR 36 crore
Industry Performance • Positive growth in the automotive sector, especially in two-wheeler and EV segments. • Recent decline in EV sales attributed to policy changes.
Incident Report • Fire incident at Rai factory caused damage but was covered by insurance, allowing for quick operational resumption.
Accounting and Financial Discussions • Management clarified accounting treatment for asset write-offs due to fire damage. • Concerns raised about employee benefit expenses and alignment with company performance. • Guidance for EBITDA margins set at 13% to 13.5%.
Market Insights • HSMI Business: Revenue stability and market share confirmed. • Gogoro Partnership: SKD production started, full localization planned in 6-8 months. • Toyodenso Projects: Ongoing work on bank angle sensors and new initiatives.
Sales and Revenue Trends • Decline in overall two-wheeler sales by 9% year-over-year attributed to short-term factors. • Management optimistic about future growth in the EV market, with a current market share of nearly 6%.
Financial Position • Company operates with zero debt and minimal interest costs. • Slight decline in gross margins due to product mix and cost escalations. • Stable capital expenditure outlook for the year.
Future Outlook • Positive FY24 revenue outlook driven by: • Growth in the auto industry • Over 80 new projects • Increased LED contributions • Higher market share in EVs • Growth in the four-wheeler segment • Anticipated 5-10% annual increase in LED contributions and a stable order book of approximately 9.5 billion.
Product Development • New products, including hub motors, expected to have initial lower margins but improve with localization. • Management remains optimistic about future growth and margin enhancement.
Key Highlights • Date of Call: June 1, 2023 • Submission: Transcript submitted to the National Stock Exchange of India on June 6, 2023.
Financial Performance • Revenue Growth: 18% increase for FY23. • EBITDA Growth: 28% increase. • Profit After Tax: 46% rise. • Quarterly Sales Decline: Noted due to reduced production from Honda.
Electric Vehicle (EV) Segment • Partnership: Collaboration with Gogoro India to enhance product offerings. • Order Book: Increased to approximately INR 950 crores with 28 customers in the EV segment. • Market Share: Currently holds a 5% share in the EV top line.
LED Contribution • Current Contribution: 60-65% in the latest quarter. • Future Expectations: Anticipated to stabilize around 60%.
Capacity and Production • Current Capacity: Supports turnover of INR 2,300-2,400 crores. • Gogoro Production: Set to begin in August, generating revenue in FY '24.
Customer and Market Insights • Yamaha and Harley-Davidson Revenue: INR 280 crores and INR 38.15 crores for FY '23, respectively. • Challenges: Limited growth for Harley-Davidson due to model constraints.
Future Outlook • Capex Plans: Estimated INR 75-100 crores over the next 18 months for expansions. • Market Growth: Optimism for double-digit growth driven by increased vehicle demand and financing availability.
Management Insights • Domestic vs. Export Market: Strong domestic demand despite challenges in the export market. • Competitive Advantages: Emphasis on quality, cost, delivery, and development to retain customers.
Conclusion • Engagement: Management expressed appreciation for participant questions and engagement during the call.
Fiem Industries Limited Q3 FY23 Earnings Call Summary
Date and Submission • Date of Call: February 16, 2023 • Transcript Submission: February 22, 2023, to the National Stock Exchange of India
Financial Performance • Sales Growth: • Q3 FY23 sales increased by 13.5% to INR 437.9 crores • 30% increase in sales for the first nine months of FY23 • Net Profit: • Q3 net profit of INR 32.02 crores, a 33.19% year-on-year growth
Industry Outlook • Optimism: • Positive outlook on the Indian economy and two-wheeler industry growth • Increased adoption of electric vehicles (EVs) anticipated
Key Discussions • LED Lighting Penetration: • Significant value in LED sales; specific volume figures not available • Increasing LED penetration as conventional lamps are replaced • EV Segment Performance: • Concerns about flat performance addressed; overall EV sales increasing • Margin Improvement: • Contribution margins improved to 39% • Price escalations from customers aiding margin recovery
Customer and Market Insights • Yamaha and Hero Motors: • Sole supplier of headlamps and taillamps for Yamaha's new models • Hero Motors in a ramp-up phase for sales • Market Share: • Significant shares with major clients like TVS and Yamaha • Future Demand: • Confidence in returning to pre-pandemic demand levels
Raw Material and Production Insights • Raw Material Prices: • Fluctuations typically passed on to customers • Capacity Utilization: • Currently at 75%, potential to exceed 90% • LED Transition: • All upcoming supplies for Hero Motors will be LED
Financial Guidance and Future Plans • Revenue Growth Guidance: • 15% growth expected for FY '23 • Order Book: • Valued at approximately INR 850-900 crores • LED Share Target: • Aim to increase from 50% to 60% in FY '24
Closing Remarks • Management Engagement: • J.K. Jain expressed gratitude for participant engagement • Encouragement for Further Inquiries: • Participants invited to reach out with additional questions