Fiem Industries- Lighting Up The Future Growth
About the Company
Fiem industry has decided to go for two more other segments:
- LED luminaries for indoor and outdoor applications
- LED Integrated Passenger Information Systems for railways and buses
It has a wide range of lighting systems and rear view mirrors, sheet metals parts and plastic components for four & two wheelers. Its diversified products portfolio includes rear view mirrors, head lamps, tail lamps, signaling lamp, roof lamps, mudguards, warning triangle, complete rear fender assembly, frame assembly, wheel covers, LED Display Panels and different sheet metal & plastic parts, etc. It is capable of catering to the requirements of nearly all segments of automobile industry like four-wheelers, Light commercials vehicles, Heavy commercials vehicles and tractors.
Fiem has manufacturing facilities at
- Kundli (Sonepat, Haryana) (Unit I)
- Hosur (Tamil Nadu) (Unit II & III)
- Mysore (Karnataka) (Unit IV)
- Hosur (Tamil Nadu) (Unit V)
- Nalagarh (Himachal Pradesh) (Unit VI)
- Rai (Sonepat, Haryana) (Unit VII)
- Tapukara (Rajasthan) (Unit VIII)
Fiem Industries Limited is in a list of Multibagger stocks in Dynamic Levels.
| EXCHANGE SYMBOL | FIEM INDUSTRIES | Average Daily Movement [ADM] | 34.51 |
| Current Price * (Rs.) | 822.95 | Average Volume [20 days] | 34059 |
| Face Value (Rs.) | 10 | 1 Month Return (%) | -8.69 |
| 52 Week High (Rs.) | 944.00 (30-Mar-16) | P/E Ratio (x) | 19.15 |
| 52 Week Low (Rs.) | 475.00 (25-Aug-15) | Book Value /td> | 190 |
| Life Time high (Rs.) | 948.90 (03-Feb-15) | Market Cap | 979.23 (Cr) |
| Life Time low (Rs.) | 36.50 (09-Jan-09) | % of Promoter holding pledged | 0 |
EXPANSION & NEW PRODUCTS
Fiem industries have expanded their capacity in Rai plant in Haryana and Tapukara plant in Rajasthan. The Unit 9 in Ahmadabad, Gujarat setup to cater HMSI's new plant in Gujarat. They are further expanding their capacity in the Tapukara plant for LED Luminaires.
GOVERNMENT INITIATIVES
Government initiatives to increase the use of LED in quest of saving energy and thus increasing energy efficiency will provide a drive to this industry. The National Program for LED-based Home and Street Lighting launched in 2015 envisage installing LED bulbs for domestic and replacing the existing street lights with LED street lights. The large scale demand produced by this program will help the domestic LED industry to pick up speed.
The Government has recognized railway as among the main thrust for economic growth and rolled out various plans to improve and bring up to date this mode of transportation. Announcement of modernizing the station navigation information system by Modi Government in the 2016 rail budget will have a positive impact for the IPIS segment including coach guidance, a PC based announcement system and IPIS with train indication.
Clients
- 2 Wheelers : TVS,HONDA,SUZUKI,YAMAHA,MAHINDRA,HERO,PLAGGIO,HARLEYDIVIDSON,LML,HEROELECTRIC,BSA MOTORS,LOHIA.
- 4 Wheelers: TATA,FORCE,ASHOK LEYLAND / NISSAN,TATA/ MARCOPOLO,HYUNDAI,DIAMLER,GM,MAHINDRA REVASKODA,WALKSWAGON,DAEWOO,RENAULT NISSAN,SWARAJ MAZDA,HMT,JCB,VST,MARUTI SUZUKI,TEREX .
FINANCIAL REVIEW
On the financial performance side, the year 2015 has been another successful year for Fiem with overall strong performance. The net sales of the Company grew by 14.70% FY 2015-16 to Rs. 820.12 Crore as against Rs. 716.16 Crore in the previous year. On the profitability side, the Profit after tax was Rs. 42.48 Crore in comparison to Rs. 37.28 Crore in 2014. The company has been able to consistently perform better and is growing well despite slow growth in the auto industry during this period. This has been possible because of relentless efforts of the management of the Company and support from its valued OEM customers.
Conclusion:
Indian auto component makers are well placed to take advantage of the globalization of the sector as exports potential could be amplified extensively in the coming days because of positive momentum in the Economy and ‘Make in India’ initiative.
Backed by their strong presence in the automotive segment and the excellent relationship that they maintain with their clients, Fiem has successfully leveraged the consistent growth of the two-wheeler segment in the recent times. The wide range of products ranging from mirrors and lamps, plastic moulded parts to sheet metal products are well accepted by their clients due to strict adherence to high quality and cost competitiveness.
Their venture into LED luminaires and Integrated Passenger Information System (IPIS) reflects their diligent pursuit for steady growth. The IPIS business segment would receive a drive from Government's focus in modernizing the railway infrastructure including the IT system.
The announcement of modernizing the station navigation information system by the government in the FY16 rail budget will have an optimistic impact for the IPIS division including IPIS with train indication, coach guidance, and a PC based announcement system.
As per our estimate, the stock at CMP of 822 is trading at P/E of 19.15, The Debt Equity ratio is 0.38 with interest coverage ratio of 8.60 the return on equity is 18.68% and the return on asset is 8.58%
On the basis of above factors we recommend a buy in Fiem Industries for long term with a target of Rs.1050
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