# 1. Financial Performance ## A. Key Figures * Sales: ₹711.42 Cr Q2 FY26 (+17.12% YoY) · ₹1,360.49 Cr H1 FY26 (+15.19% YoY) * EBITDA: ₹99.1 Cr Q2 FY26 (13.93% margin) · ₹186.46 Cr H1 FY25 (13.7% margin) ## B. Revenue Growth * **Record Top-Line Performance:** Highest-ever quarterly and H1 sales achieved, reflecting strong demand momentum and effective market positioning. * **LED Dominance:** LED products accounted for **92% of total lighting sales**, underscoring strategic focus and product transition success. ## C. Profitability Trends * **Margin Expansion Achieved:** EBITDA margin reached **~14%**, driven by favorable product mix and operating leverage, in line with management’s targeted range. * **Outperformance Drivers:** Competitive edge stems from **blended product mix and operating efficiency**, not broad price increases, enabling sustained margin resilience. ## D. Balance Sheet Items * **Provision Reversals:** Reversal of **₹5–3 Cr** in bad debt and warranty provisions due to better-than-expected collections and claims experience. * **Non-P&L Insurance Entry:** Insurance-related amount treated as a **recoverable receivable** on the balance sheet, with no P&L impact. * **Inventory Write-Off Excluded from EBITDA:** ₹31 Cr write-off adjusted out, preserving core profitability metrics. ## E. Cash Flow & Capex * **Sustained Investment Pace:** H1 FY26 capex reached **₹81 Cr**, including **₹28 Cr in Q2**, supporting ongoing capacity and efficiency initiatives. --- # 2. Order Book & Demand ## A. Key Figures * 2-Wheeler Domestic Production: 6.9 million units (+10.6% YoY) ## B. OEM Demand Trends * **Robust Industry Growth:** Strong double-digit volume momentum in the 2-wheeler sector, fueled by rural recovery post-monsoon and resilient urban demand. * **Sustained Production Strength:** Mass production models continue to perform well, underpinning stable domestic volume trends. ## C. Export Volume Growth * **Expanding Global Footprint:** Export volumes rising across multiple models, with notable traction in **Brazil and Europe** markets. * **New Model Contribution:** Recent product launches are translating into sales, reinforcing export-led production growth. --- # 3. Product & Segment Performance ## A. Key Figures * **LED Market Share (Monarch Networth 2W):** **63%** (vs. industry 30–40%) * **Revenue Split:** **97%** 2-wheeler · **3%** 4-wheeler * Passenger Vehicle Contribution: Declined to 2.3% from 5–7% (mathematical adjustment) ## B. LED vs Non-LED Mix * **LED Growth Trajectory Intact:** Despite short-term quarterly softness in LED sales, management reaffirms **strong annual shift toward LED**, now standard in all new projects. * **Value-Driven LED Transition:** Fiem’s outperformance vs. sector fueled by **3x revenue uplift** from halogen-to-LED shift, even without volume parity. * **Product Mix Favors LED Lighting:** Recent mix shift driven by **new model launches**, increasing LED’s share within automotive lighting. * **Strategic Priority Maintained:** Automotive lighting—especially LED—remains core focus, with mix optimization and export performance enhancing growth. ## C. 2-Wheeler vs 4-Wheeler * **2-Wheeler Momentum Strong:** Industry on track to surpass **pre-pandemic production highs**, underpinning Fiem’s dominant 97% revenue base. * **4-Wheeler Expansion Accelerating:** New wins include **number plate, fog, and rear reverse lamps** for Mahindra models, with plans to enter **full lighting systems** (headlamps, taillamps, ambient). * **Passenger Vehicle Share Dip Explained:** 4-wheeler contribution fell to 3% due to **mathematical dilution** from explosive 2-wheeler growth, not operational weakness. * **Growth Pathway Defined:** 4-wheeler volumes expected to rise over 12–18 months via **differentiated product offerings**. ## D. Technology & Innovation * **Industry-First Animation Tech Launched:** Fiem debuted **first-ever animated headlamps and rear lamps** for 2-wheelers (CAN-based), showcased on TVS Norton at Milan. * **High-Tech Design Wins:** Supplied **advanced LED headlamps and taillamps** for Yamaha’s XSR 155 and first EV, and **projector headlamps** for new Hero models in mass production. * **Sole-Source Advantage:** Fiem is **exclusive provider** of its animation technology, with deployments planned in **multiple global and domestic models**. * **R&D Focus on Electronics:** Over **100 engineers** dedicated to electronics, enabling in-house innovation in **CAN systems, ambient lighting**, and smart features. * **Ambient Lighting Breakthrough:** Successfully demonstrated **proof-of-concept** to customer; poised to become **recognized supplier** in emerging segment. --- # 4. Customer & Project Pipeline ## A. Key Figures * **Revenue Contribution:** **25%** from HMSI · **6%** from Royal Enfield · **<10%** from Hero * **Future Revenue Pipeline:** **INR1,000–1,200 Cr** from over **100 active projects** * 4-Wheeler RFQ Conversion: Some RFQs converted to business nominations * **Content per Vehicle (CPV):** **~INR60,000** (fully loaded LED car) · **INR20,000–25,000** (standard) ## B. Key OEM Contributions * **Core OEM Momentum:** Strong growth driven by TVS, Royal Enfield, and Yamaha, with Fiem supplying critical components for multiple new model launches. * **Royal Enfield Upside:** Revenue contribution expected to rise meaningfully, with management targeting replication of >90% market share success from classic lamps. * **HMSI & Mahindra Expansion:** HMSI remains a top contributor with revenue tracking production trends; Mahindra deployment expanding beyond Scorpio and Thar to additional models. * **Hero Volume Growth:** Volumes increasing with two models in production and several in pipeline; management signals stronger performance ahead despite sub-10% revenue share. * **First OEM Order Live:** Production underway for initial OEM order, with strong quality and delivery expected to catalyze adoption across other key customers. ## C. RFQs & Business Wins * **Design Wins Accelerating:** Secured projector headlamps for Hero Glamour X 125, winker lamps for Glamour/Xtreme, and multiple lamps for Mahindra Bolero and Scorpio. * **Premium & EV Breakthroughs:** TVS Norton models at Milan show feature Fiem components; company is sole lens supplier for Yamaha’s first electric vehicle, marking a strategic EV win. * **4-Wheeler Traction Building:** Production started for XUV700 refresh; RFQs advanced with Force Motors and Mercedes, signaling expansion into premium and commercial automotive segments. * **Robust Project Pipeline:** Over 100 active development projects expected to generate substantial future revenue, with RFQ value stabilized by new inflows offsetting conversions. ## D. Content per Vehicle * **Product Upskilling in 4-Wheelers:** Progressing from basic license plate lamps to high-mounted stop lamps, reflecting increased technical capability and value capture. * **CPV Divergence:** Passenger vehicles offer significantly higher content per unit than 2-wheelers, with premium LED configurations commanding **~3x** the value of standard setups. --- # 5. Manufacturing & Capacity ## A. Key Figures * **Capex:** **₹38 Cr** in 1H FY26 ## B. Plant Utilization * **Higher Efficiency:** Improved operating leverage driven by increased capacity utilization, now in the **80% range**, reflecting better asset productivity. ## C. In-House Capabilities * **Strategic Differentiation:** In-house production remains a core advantage, supporting competitive margins and end-to-end control. * **Tech Advancement:** Innovation lab established to accelerate development of futuristic technologies and strengthen vertical integration. ## D. Expansion Plans * **Near-Term Execution:** New warehouse in Pune to boost customer support, marking next phase of operational scaling. * **Future Capacity:** Decision on dedicated 4-wheeler plant expected by year-end, contingent on customer nominations and demand validation. * **Proactive Investment:** Capex deployment ensures production capacity is aligned with demand visibility over the next 24 months. --- # 6. Supply Chain & Operations ## A. Key Figures * **Inventory Damage:** **₹21 Cr** from fire incident * **Fixed Asset Damage:** **₹28 Cr** from fire incident ## B. Component Sourcing * **Resilient Supply Chain:** No expected production delays from Nexperia chip issues due to **multi-sourcing strategy** and proactive customer coordination. ## C. Fire Incident Impact * **Near-Full Localization in LED:** LED lighting manufacturing is almost fully localized; only electronic components and LED chips remain imported. --- # 7. Risks & Operational Factors ## A. Production Disruptions * **Headline:** Financial impact of fire incident fully recognized in P&L with appropriate provisioning. * **Headline:** Market share in Honda business remains stable despite product-level fluctuations. * **Headline:** No erosion in LED product share; minor shifts attributed to normal product cycle variations. --- # 8. Guidance & Outlook ## A. Margin Sustainability * **Sustainable Margins Confirmed:** Management affirms current margin levels are sustainable, supported by new volumes and structural drivers. ## B. H2 Performance View * **H2 Growth Trajectory:** Structural momentum in 2-wheeler production underpins strong full-year trends, with H2 expected to improve on H1 performance. * **OEM Outperformance Expected:** Management remains bullish on relative OEM performance, anticipating industry outperformance despite lack of specific guidance. * **PV Business Timeline Intact:** Update on passenger vehicle business on track for end of FY, consistent with prior **6 to 9-month** timeline. ## C. Strategic Expansion * **Disciplined Expansion Approach:** Company prioritizing steady execution and customer trust over rapid scaling, taking a step-by-step path. * **Positive Segment Outlook for FY '27:** Both 2-wheeler and 4-wheeler segments seen improving, with **2-wheelers showing stronger recovery signals** and sustained green shoots.