Summary
Fiem Industries Limited - Q3 FY26 Earnings Call Summary Thursday, February 12, 2026 4:00 PM
Event Participants
Executives 6 Arvind K. Chauhan, J.K. Jain, O.P. Gupta, Rahul Jain, Rajesh Sharma, Vineet Sahni
Analysts 8 Anubhav, Garvit Goyal, Kush Nahar, Pavan, Sahil Sanghvi, Shubham Sehgal, Siyaa Deshmukh, Vijay Kumar Pandey, Vinay Nadkarni, Viraj
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Revenue | ₹685.81 crores | +16.22% YoY; Driven by broad-based 2-wheeler recovery and healthy festival demand. |
| EBITDA | ₹97.70 crores | +25.45% YoY; Margins crossed 14% for the first time due to operating leverage and efficiency. |
| EBITDA Margin | 14.25% | +105 bps YoY; Driven by product mix, cost-efficiency drives, and price escalations. |
| Net Profit (PAT) | ₹63.45 crores | +33.83% YoY; Supported by strong operational performance and stable input costs. |
| Capex (9M FY26) | ₹78.83 crores | Focus on capacity expansion at Tapukara and machinery upgrades. |
| Cash & Bank Balances | ₹222 crores | As of Dec 31, 2025; Retained for organic and potential inorganic growth opportunities. |
Geographic & Segment Commentary
- 2-Wheeler Segment: Remained the primary revenue driver with production growing 15% YoY to 6.8 million units. Management noted that industry volumes are expected to cross the previous FY19 peak of 24.5 million units by year-end.
- Passenger Vehicle (4W) Segment: Currently supplying number plate lamps, rear reflectors, and fog lamps to Mahindra & Mahindra. Company is leveraging existing 2W facilities for initial 4W orders while building credibility for larger lighting systems.
- Export Markets: Indirect exports through OEMs (Honda, Yamaha) remain significant, alongside direct supplies to European brands like Piaggio and Aprilia. Supply for the Yamaha Tracer 700 model to Europe has reached continuous mass production status.
Company-Specific & Strategic Commentary
- Electronics Integration: Company is increasing in-house SMT/EMS capabilities as LED lighting content now includes 30%-80% electronic value. New EMC/EMI labs in Gurgaon are now undergoing trials for internal product validation.
- Green Energy Initiative: Rolling out solar (rooftop and open access) and wind energy projects across all plants to reduce energy costs and achieve carbon neutrality. Rooftop solar implementation is expected to take 4-6 months per site.
- Advanced Lighting Tech: Development focus has shifted toward high-value solutions including laser systems, adaptive drive beams (ADB), and matrix lighting. A proof of concept (PoC) for ambient interior lighting is currently underway for a 4-wheeler customer.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Revenue Growth | 15% - 20% (FY26-27) | Based on organic 2-wheeler trajectory; 4W contributions would be additive. |
| EBITDA Margin | 14% + (Mid-term) | Target floor based on operational efficiencies and increased electronic content. |
| Total Capex | ₹200+ crores (Next 24 Months) | Funding capacity expansion, 4W project requirements, and technology upgrades. |
| FY26 Total Capex | ₹100 crores (Full Year) | Revised estimate to support current order pipeline and new lab infrastructure. |
Risks & Constraints
| Risk | Context |
|---|---|
| Industrial Accidents | Two fire incidents (Unit 7 and Unit 8) occurred in the last two years due to short circuits. While ₹50 crores has been received for Unit 7, a new ₹82.30 crore claim is pending for Unit 8. |
| Customer Concentration | High dependence on HMSI and TVS (approx. 65% of revenue). Variations in specific model performance of these OEMs can lead to growth decoupling from the broader industry. |
| Aftermarket Limitations | LED lighting systems have lower replacement rates compared to traditional bulbs. Additionally, NDA restrictions with OEMs limit the ability to sell proprietary designs in the open market. |
Q&A Highlights
Model Mix & Market Share
- Question: Why did revenue grow 16% while key OEMs like HMSI and TVS grew 20%+? (Anubhav)
- Answer: Growth is highly dependent on model mix; certain high-volume models are exclusive to competitors, but Fiem’s wallet share with major OEMs remains stable (Vineet Sahni).
Passenger Vehicle Strategy
- Question: When will 4-wheeler business contribute meaningfully and will it require dedicated plants? (Garvit Goyal)
- Answer: Currently using existing facilities for small lamps to build credibility; a detailed 4W business plan and revenue roadmap will be shared in May 2026 (Vineet Sahni).
Margin Sustainability
- Question: What drove the record 14.25% EBITDA margin and is it sustainable? (Viraj)
- Answer: Driven by operating leverage, efficiency drives, and specific price escalations received during the quarter. Management is confident in maintaining a 14%+ floor (O.P. Gupta/Rahul Jain).
New Business Wins
- Question: Any updates on Mercedes-Benz or Force Motors? (Shubham Sehgal)
- Answer: Fiem is now an approved potential global supplier for Mercedes-Benz small lamps; Force Motors project has converted and is under development (Vineet Sahni).
Key Takeaway
Fiem Industries delivered a record-setting Q3 FY26, with EBITDA margins crossing the 14% threshold for the first time on the back of operational efficiencies and price escalations. The company capitalized on a 15% YoY recovery in the 2-wheeler industry, maintaining its dominant position with HMSI and TVS while successfully ramping up LED supplies for export models like the Yamaha Tracer 700. Strategically, Fiem is pivoting toward higher electronic content (30-80% of product value) and has secured a breakthrough as an approved global supplier for Mercedes-Benz. While fire-related insurance claims for Unit 8 remain a point of monitoring, the company’s strong cash position of ₹222 crores and planned ₹200 crore capex over the next two years provide a cushion for both organic expansion and potential inorganic moves into the 4-wheeler segment. Management maintains a confident outlook with a 15-20% growth guidance, underpinned by rising premiumization in vehicle lighting.
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