FIEM industries : auto ancillary player

Very interesting Q4 call by Fiem. Some key triggers discussed, PFB my notes.

• Revenue growth triggers

  • Gogoro

    • Already developed headlamp, taillamp and blinkers for 2 models for India and export markets

    • Hub motor assembly, motor controller and ECU

      • Has started assembly and from August commercial revenues are expected to start; But significant ramp-ups will happen from FY25; Homologation and regulatory requirements already fulfilled

      • Will start with CKD which will be indigenized in a phased manner

      • Investment quantum not yet finalized – will inform in next quarter

      • Margins will be like Fiem existing business margins

    • Total content per vehicle is going to be 15-18k INR

    • For supplies, capacities will be put up in existing Tapukhera Plant (RJ)

  • 4W

    • Appointed Vineet Sahani as CEO & Whole Time Director; Has a lot of experience in 4W having been CEO of Minda & Lumax & Varroc (Last role Lumax Group CEO)

    • No timelines yet – company expects good customer response due to Vineet’s customer relations

  • 2W demand uptick post Covid

    • 20-25% lower than peak volumes

    • Expects double digit industry volume growth over next 2 years; Could also surprise higher

  • Hero

    • 1 product has already started from April – ICE model
    • One more model to be started from August – ICE model
    • EV model products are under development
    • Total 3 Hero projects with FIEM

  • Yamaha – Yamaha 3 new models; 280Cr FY23

  • Harley Davidson – 38Cr; Exports to Thailand and USA; Growth will be moderate

  • EV

    • 5% share of revenue as of now, total 28 EV customers

    • Some customers badly impacted; Others are growing sales

    • TVS iCube products are under development; supplies to start in a few months

• Order book – 950Cr

• Capex guidance – 75-100Cr capex over next 18 months for regular business – does not include any capex for 4W or Gogoro

• Guidance – Guides for outperforming industry growth

• Capacity utilization – Current capacity can take Fiem to 2300-2400Cr depending on product composition; With LED the turnover can be higher too; Capacity enough for organic growth; New businesses will require new capex which are yet to be finalized

• Margin growth triggers

  • LED mix for Q4 – 56%; Expect a mix of 60-65% for next 2 years
  • EBITDAM to remain in 13.5%
  • Export vs domestic margins are same
  • Higher margins this Q due to price escalation in last Q