WEALTH DISCOVERY SECURITIES PVT. LTD. 1 Stock Details Industry Auto Ancillaries Bloomberg Code FIEM:IN BSE Code 532768 Face Value (Rs.) 10.00 Market Cap. (Rs. Mn) 7,189.30 52wk. High/Low (Adjusted) ( (Rs.) 945.30/475.00 Shareholding Pattern Jun '15 Promoter (%) 69.96FII (%) 5.12 DII (%) 1.49 Public - Other (%) 23.43No. of Share Outstanding (mn) 11.96 Valuation Summary FY 14A FY 15A FY 16E FY 17E P/E (x)* 13.22 16.92 14.00 13.50 EV/EBITDA (x)* 6.16 7.40 6.73 6.57 P/BV (x)* 2.50 3.16 2.92 3.25 *Based On CMP on Reco Date for FY 15 and Market Price as on 1 stApr is taken for FY14 Key Financial Rs. Mn FY 14A FY 15A FY 16E FY 17E Net Sales 7,205 8,255 9,237 10,346 EBITDA 891 1,036 1,192 1,331 Net Profit 373 425 561 645 EPS (Rs.)* 31.2 35.6 46.9 54.0 *Unadjusted for any bonus issue Key Ratios FY 14A FY 15A FY 16E FY 17E EBITDA Margin (%) 12.4 12.6 12.6 12.9 EBIT Margin (%) 9.3 8.8 9.7 9.6 Net Pro. Margin (%) 5.2 5.1 6.1 6.2 Debt/Equity (x) 0.29 0.23 0.08 0.04 RoNW (%) 20.4 20.0 22.6 24.1 RoCE (%) 13.4 14.4 17.9 20.5 FIEM Industries03 Nov 2015 Initiating Coverage (BUY) INR 601 INR 728 CMP Target Price We recommend 'BUY' on FIEM Industries for a target of INR 728 - valuing the company at P/E of 13.5 x FY17E Earning. Continuous order inflow for LED business: The LED market has emerged as one of the fastest growing industries in India. This industry has been majorly driven by factors such as falling prices of LED lights, increasing initiatives taken by the government and rising concerns with respect to energy conservation. Further, modernization of Indian Railways, Transport Infrastructure Development and metro rail systems will give a big boost to the Integrated Passenger Information System. The key driver of the increased usage of LED’s over the next few years will be the government’s push to replace street lighting (via municipalities) and residential lighting (via state discoms) to achieve energy efficiency and savings. Continuous order inflow for LED business can be the revenue driver for Fiem’s business in coming years as it is investing aggressively in manufacturing facilities for its LED business. Major revenue from Two Wheeler Segment which has the highest growth potential in coming periods: At present most of the Fiem’srevenue comes from the two wheeler segment. Fiem’s nine manufacturing plants are spread across India tocater to requirements of different OEMs. Today, Indian automobile Industry counts as seventh-largest producer in the world with an average annual production of 17.5 million vehicles. According to CII, the Indian automobile market is estimated to become the 3rd largest in the world by 2025 and will account for more than 5% of global vehicle sales. India is the second- largest two-wheeler manufacturer, the largest motorcycle manufacturer in the world. The volume production of two wheeler in India has a growth rate of 9.58% in FY14-15 from previous year FY13-14, and with the recovery of economy coming fast, this segment growth is expected to more than the previous growth recorded. VALUATIONS AND VIEW: Given the visibility of high growth prospects in coming years in two wheeler industry and LED industry with its strong product base, its strong client base, a 27% CAGR in profits over FY15-17E along with increasing operating margins; we value the business at 13.5x FY17E EPS and recommend a BUY rating on the stock with a target price of INR 728 per share. One Year Price Volume
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635822347825727093 FIEM Industries Initiating Coverage 11-03-15 Final
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8/15/2019 635822347825727093 FIEM Industries Initiating Coverage 11-03-15 Final
The rapidly globalising world is opening new avenues for the transportation industry, generating the need for more efficient
and reliable modes of transportation, which is consequently adding to the auto component industry’s growing opportun
According to a report by the Confederation of Indian Industry (CII), the Indian auto component industry is set to become the
argest in the world by 2025. Also, by that time, newer verticals and opportunities for component manufacturers will open
the automobile market will shift towards electric, electronic and hybrid cars and newer technologies will have to be adopt
systematic research and development.
ndian auto component makers are well positioned to benefit from the globalisation of the sector as exports potential cou
ncreased significantly in the days to come because of positive momentum in the Economy and ‘Make in India’ initiative.
ndia is probably among the most competitive country in the World for the Automotive Industry. It covers near to 100
technology or components required to make a car.
LED Lighting and Integrated Passenger Information System (IPIS):
LED Light: The LED market has emerged as one of the fastest growing industries in India. This industry has been majorly driv
factors such as falling prices of LED lights, increasing initiatives taken by the government and rising concerns with respect to e
conservation. Further, modernisation of Indian Railways, Transport Infrastructure Development and Metro Systems will give
boost to the IPIS.
Hon’ble Prime Minister, Mr. Narendra Modi has recently launched the “National Programme for LED based Home and S
ighting” with the aim to replace incandescent bulbs (ICLs) with LED lights for residential and street lighting. Driven b
government’s initiatives, the LED market is growing with a very fast pace, earlier and faster than expected.
The key driver of the increased usage of LED’s over the next few years will be the government’s push to replace street lightin
municipalities) and residential lighting (via state discoms) to achieve energy efficiency and savings. The government expec
ban the sale of 100W, 60W and 40W ICL’s in next few years and this along with a further fall in prices of LEDs would fuel a
scale switchover to LEDs. Commercial establishments (retail outlets/offices/shops) to increasingly opt for LED down ligh
replace less efficient FTL’s and CFL’s; the price gap of LED’s vs CFL’s down lights has narrowed significantly which provides a
ncentive to switch to LED lights.
PIS: Integrated Passenger Information System is a computer based electronic system providing audio and visual informatpassengers through multiple displays spanning over the entire station and coaches. It is widely used in Buses and other av
ike Metro, Railway etc. It may be used both physically within a transportation hub and remotely using a web browser or m
device. IPIS covers various modes of transportation viz Trains, Metro Trains and Public Transport Vehicles like Buses, Ra
Stations and Bus Stops etc. The information to the passenger is provided through audio announcement and Visual inform
through various types of displays.
Way Ahead:
Advent of smartphones and better connectivity are the primary factors among others which will drive the growth and advance
of the Passenger information system market. With the mobile applications installed on a smartphone connected with a net
the information can be accessed any time. Mobile applications in this market are going to be one of the key segments which
a promising future in terms of revenues. On the other hand, passengers are becoming more demanding and to enhanc
passenger experiences, transport service providers started offering other features along with scheduling information.
features are mainly entertainment, in-transit connectivity, news, and emergency communication. The vendors in the PIS m
are constantly trying to introduce better connectivity into their solutions which will help transport service operators to pr
better services to the passengers.
During next 4-5 years, use of LED’s to be driven by replacement of streetlights, down lights and retrofit of LED lamps unde
government’s recent initiative called the “National Programme for LED based home and street lighting”, launched b
8/15/2019 635822347825727093 FIEM Industries Initiating Coverage 11-03-15 Final
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Disclosure of Interest Statement FIEM Industries
1.Analyst ownership of the stocks mentioned above No
2.Served as an officer, director or employee No
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8/15/2019 635822347825727093 FIEM Industries Initiating Coverage 11-03-15 Final