Company Update: FIEM Industries Ltd - BUY - TP Rs.1254 - Kotak

Strong two wheeler dispatches by key customers is expected to improve FIEM's performance going ahead. Post slowdown in 2HFY17, two wheeler demand has made a strong comeback with volume growth at ~9% (FY18 YTD) on a relatively higher base. FIEM derives 89% of its revenues from the two wheeler segment and demand recovery in this segment is positive for the company. FIEM also benefits from faster than industry growth reported by its key customers. FIEM's top five customers accounting for ~81% of automotive segment revenues (~76% of overall revenues) have reported 18% YoY growth in production volumes, so far in FY18 (April-July). FIEM's performance in the LED business (~5.5% of company revenues) is expected to remain subdued in the near to medium term. Strong growth in the auto segment performance is expected to aid improvement in EBITDA margin. We retain BUY on the stock with unchanged price target of Rs1,254.

Shares of FIEM INDUSTRIES LTD. was last trading in BSE at Rs.890.7 as compared to the previous close of Rs. 905.05. The total number of shares traded during the day was 1752 in over 96 trades.

The stock hit an intraday high of Rs. 918 and intraday low of 890. The net turnover during the day was Rs. 1581121.

Source : Equity Bulls

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