Yes Yogesh… you are right i think…The margins in LED business can go up
if they can sell them at retail markets…Let us see how they execute that
part of the strategy…
Does anyone know the current capacity utilization of their LED business. Is it possible that the margins will go up once you have better capacity utilization?
As a technology becomes main stream there is always a downward pressure on the price - would their costs come down as well to maintain good pricing?
PS: Views / questions might be biased as I am invested in the company
Thanks,
Navneet
Today, came across the news that domestic electronic component manufacturers are to invest Rs. 1,000 crore in the new ELCINA Electronic Manufacturing Cluster (EMC) which is expected to go live by Oct 2017. Fiem is one of the 19 domestic investors in this EMC - probably an LED lighting products manufacturing plant. This ELCINA EMC is located at Bhiwadi, Rajasthan, and comes next to the proposed Dedicated Freight Corridor (DFC). The manufacturing units in the EMC will get government subsidies and tax benefits according to the report. Here is the link to the news report.
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Last qtr resultis weak?? its demonetisation effects or something else?
Regards,
Amit
Sure, FIEMs 85% of revenue base is from 2 wheeler manufacturers. And that
demand got hit in DeMo. In addition, the issue seems to be that the LED
unit sales is not gaining traction as expected. And also the EBITDA margin
of LED unit is below that of the auto ancilliary. That is a concern. I hope
they come back strongly in the next 1 - 2 quarters. Having said that, the
current market price is very depressed and on a small positive news, the
stock could again be rerated…
I was listening to an equity talk and it was mentioned that FIEM is a vendor for Honda Activa which is the highest selling 2 wheeler vehicle in India. And that FIEM can be a listed play for Honda. I am not sure recent few months but this information was a trigger for me to look closely into FIEM.
Abhishek, nice report. I am an automobile engineer and undrstand this business a bit.
Whats are the plans of the FIEM to supply to 4 wheelers head and tail lamps? why are they strugglig? do they not have technology?
Noticed that Lumax Industries suplies 90% of the market of 4 wheelers lights. Lot of changes are happening in 4 wheeler lighting technology and asthetics in the developed world, lights are becoming very critical componenet of the new asthetics and safety. And Indian market is catching up now. Can this company tap it and grow its revnue from 4 wheelers?
And there is news about the new JVs with Honda locks, ToyoDenso. Are these going to be more 4 wheeler focussed or 2 wheelers? do we know. I know about Honda locks, they just do the 4/2 wheelers locking systems and security systems.
ToyoDenso is more of 4 wheelers switches and clusters.
So have you spoken to the management/IR about what exactly is going to be the parts that are going to be produced out of these JVs specifically and whats going to be the size of business? The news in the economic times suggests they are targettng Rs4000cr by 2020. That seems bit too high considering they are about rs 1000cr now. Since its part of your portfolo and looks like you have done some work,
have you ever attended any calls or investors meet? Whats your understanding of the management?
In auto industry, 3 disruptive techlogies are emrging
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Electrification: Very real, may be down the line 10 more years, you could see significantly higher elecrtic cars on road in developed makets and also in China and india (because of they are clean energy). So we could see many folds growth in electric motors, batteries and its accessories like switches harness etc. Would like to know which Indian supplier could benifit in this domain…
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Autonomous vehicles: Lot of talk but will take time. Already lot of high end vehicles (BMW, Benz, Audi, Volvo,Lincoln, Cadillac, Tesla) have become very sophesticated with lot of driver assistance technologies. I think Silicon valley companies will lead the development of technologies (Google, Intel, Nvidia, Apple) but big opportunities for suppliers who make clusters, sensors, switches, cameras. Do you have any idea which Indian supplier could fit here?
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3D printing: Not everything i the car but atleaset some castings and forgings and plastics.
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Promoters renumerations dont look very high, but entire fanily is involved (including daughter and wife) in the business. There is oly 15 lac shares available with retail investors (of 1.32 cr shares), so not much liquidity. 2 of the funds are very credible, Wasatch (abt 2.9%) and Saif India FII holdings (abt 4.5%).
Saif India FII holdings has invested in very well known businesses including Paytm, Justdial, Manpasand Treebo, Edelwiess, etc.
I think Indian automobile/Transportation industry could become very big (may be that of China down the line 20 yeras? , China now is laregest market) if the economy grows 8-9% for next few years. So the size of the opportunity is huge. I am trying to find a small size auto supplier that has strong management and product portfolio which can outgrow the avg growth of automobile industry.
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Two pure automotive lights companies that I know are Japanese. 1) Koito Manufacturing is about US$8 Billion topline and 2)Stanley lighting is about US$4 billion topline. So the size could be very high. More importantly, lights have become styling statement of automobiles in last few years. So its not just commodity for a supplier with technological edge.
SBI Mutual Fund is meeting FIEM tomorrow the 6th Apr
(This is my first message in the forum. Please excuse any violation of rules.)
I went through the FIEM Industries quarterly results of March 2017, published yesterday. Here is the link to the report: http://corporates.bseindia.com/xml-data/corpfiling/AttachLive/e8de050c-9a99-4e73-8316-235a3ac118f4.pdf
I notice a loss (of ~14.18 crores) under exceptional items. The attached note saying that this amount was written-off as a non-recoverable amount from a customer. It does not give any other details on this. In case any forum member has more details, kindly share it.
Does such a write-off hint at a weak management? How should we interpret such an event?
Regards,
Pratik
This is on account of LED business to EESL given in the notes below the results.
Is this kind of a worry for them ? Since the loss is accountable for non recoverable where as the contract of 7 years maintenance has been turned off. My question is are they putting this much of long term contract revenue as their sales ? without significant realization the sales data can always be cooked up which is definitely a pain for the investor.
This particular amount of 14 crores was lying as retention money in account receivables. It is a write off so in many ways its cash neutral and does not impact the cash flow of the company. The company took a write off in Q4FY17 and this in many ways wipes the slate clean.
What is more important is to track the progress on various JVs and MOUs that the company has signed in the automotive business, the bulk of future revenues can arise from there.Honda locks MOU can unlock significant value in the stock and the foray of the LED business into gulf countries is also a development to keep a tab on. Volume growth for 2W has been robust in the past few months and this will bode well for the company.
Hi All,
There is free fall in the stock does any one knows any reason behind it …Is fundamental of the company changed ? I went to AR and Financial i didn’t find something fishy
@dj123 R u still tracking the company
their may be two reason . i think due to crude their raw material cost will go up very much and 2nd is bad market sentiment. their are no buyers in most of good shares so with even small shares selling price goes down very much.
if any body has any news for fiem please share it…
Anyone still tracking this stock now?
any one tracking ? good results declared and attractive valuation .