Fiem Industries Ltd
NSE:FIEMIND
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Fiem Industries Ltd
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Ladies and gentlemen, good day, and welcome to Fiem Industries Limited Q4 FY '24 Earnings Conference Call hosted by Monarch Networth Capital.
This conference call may contain certain forward-looking statements about the companies, which are based on beliefs, opinion and expectation of the company as on the date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict.
[Operator Instructions] Please note that this conference is being recorded.
I now hand the conference over to Mr. Sahil Sanghvi from Monarch Networth Capital. Thank you, and over to you, sir.
Yes. Good evening, everyone. On behalf of Monarch Networth Capital. I welcome you all to the Q4 and FY '24 Conference Call of Fiem Industries Limited. We will start the call with the initial comment about the results and the future outlook of the company. And then we will open the floor for question and answers. So without much delay, now I hand over the call to Mr. J. K. Jain, Chairman and MD of the company. Over to you, Jain sir.
Thank you. Good afternoon to everyone, and welcome to the Q4 FY '24 Earnings Call of Fiem Industries. Joining me today on the call are Rahul Jain, Joint Managing Director; Rajesh Sharma, Joint Managing Director; Vineet Sahni, CEO and Director; Arvind Chauhan, Company Secretary; O. P. Gupta, CFO; and other members of the finance team.
The investor presentation and the results have been published on both the company's website and the stock exchange. I trust that all of you must have reviewed the same.
Fiem Industries has reached a big milestone posting its highest ever sales by exceeding INR 2,000 crores and attaining a net profit of INR 166 crores in the financial year FY '24. Your company has delivered an outstanding performance, showcasing robust results for both the last quarter and the entire year. The 2-wheeler industries is growing strongly with the production volume reaching 21.5 million units in FY '24. This increase is due to the improved consumer sentiment and higher ruler demand.
April numbers for the 2-wheeler industries also reflect the robust trend in the OEM volumes. We believe this growth will continue in the coming years, reaching new highs. For the full year FY '24, our valued customers have also done well. With Honda, TVS, Suzuki and Yamaha all achieving double-digit growth this year. Their confidence in future growth is demonstrated by the plans of many OEMs to setup new plants to beat the growing demand of the market.
We also see good growth in export with Hero Harley development, new models specifically for the international market, backed by the success of the X440 locally. Additionally, TVS acquisition of the U.K.-based Norton had led to the collaborative efforts in developing new products for the Norton brand. We, thus, believe that overall demand outlook continues to be strong.
In order to position ourselves for this demand, we are also preparing for a major capital expenditure program. We expect to spend INR 250 crores to INR 300 crores over the next 3 years to drive our future growth.
In the last quarter, I announced that your company had made a breakthrough in the 4-wheeler passenger car segment in the European market. I am delighted to share that we have also received order from the reputed OEMs in the Indian passenger car segment also. We continue to make significant strides in our journey, marking this as a major milestone as we expand into the passenger car market in future.
Further, I am pleased to inform that our Board of Directors have recommended a dividend of INR 20 per share on the enhanced share capital, post to 1:1 bonus share.
I now hand over to Mr. O. P. Gupta and the finance team to update the operational performance. Thank you.
Thank you, sir. Good afternoon to everyone. First, I will present Q4 numbers. After which, I will cover the full year FY '24. The company has registered quarterly sales of INR 554.7 crores in Q4 of FY '24 as compared to INR 432.84 crores over same quarter last year, registering a growth of 28.1%. The EBITDA in quarter 4 was INR 75.46 crores translating into an EBITDA margin of 13.6% as compared to INR 60.21 crores over same quarter last year with EBITDA margin of 13.91%.
The PAT of the company has also increased to INR 47.1 crores as compared to INR 38.05 crores in Q4 of FY '23, representing an increase of 24.02%.
Now I will briefly cover the numbers for full financial year, '23, '24. During FY '24, the company has achieved net sales of rupee INR 2,014.37 crores as compared to INR 1,834.04 crores in FY '23, representing a growth of 9.83%. As a percentage of total automotive lighting, the LED lighting stands at 52% in comparison to 49% during last year. EBITDA stands at INR 267.97 crores as compared to INR 247.85 crores during FY '23.
PAT of the company stood at INR 165.84 crores as compared to INR 139.63 crores during FY '23, which is higher by 18.77%. During the year, the company has made a CapEx of [ INR 85.86 crores ].
With this, I end the financial brief, and now the floor is open for question and answers. Thank you.
[Operator Instructions] First question is from the line of CA Garvit Goyal from Nvest Analyst Advisers, LLP.
Congrats on a good set of numbers. I have 3 questions. One is our company has consistently delivered bottom line growth year after year. And while this is commendable, I'm concerned about our top line growth, despite having the [ marquee ] clients, we are only achieving lower double-digit top line growth, maybe outperforming the industry, I believe, a company of our caliber under efficient management should adopt a more aggressive approach to increase the market share and diversify further.
So can you please elaborate on why we are not pursuing more aggressive strategies for the top line growth? And what can be the steps that we are planning to take to improve our growth trajectory further? That's my question.
Thank you for that. I think, as you rightly said, we've outperformed the industry over the last many years. But also -- looking ahead, if you notice, we've actually made a lot of investments over the last 12 months and a lot of investments are now [indiscernible] as we just announced a large CapEx program. So in line with what you are saying, we've already thought through that there are several new areas that we want to work in.
The 4-wheeler segment is obviously something that is -- could be a very, very big growth driver for us. The other segments, including hub motors and others are also being talked about. So I think your point is already noted, the management has already been working over the last 12 to 18 months towards several new initiatives, and you will see the output over the next couple of years. And the investment for that is being made as we speak.
And sir, you mentioned about the CapEx, like what is the area that this INR 250 crores to INR 300 crores CapEx will go into?
It will go across. So one is obviously enhancing our existing capacity for the current segment. There is certain capacity requirement in South India. There is also going to be CapEx for the new projects, which we announced on 4-wheelers. There will also be CapEx around the motor unit. So all of that combined, we [indiscernible] INR 250 crores to INR 300 crores CapEx to happen.
And sir, I'm also concerned about the apparent delays that are happening in Fiem and the Gogoro project from manufacturing [indiscernible] motor controller. So could you please explain why there has been no meaningful contribution to our top line so far? Additionally, please also provide some details on the capital expenditure incurred on this project to the date and specify when we can realistically expect to see some of the revenue generation from this area?
See, so about this Gogoro, what they did is because initially, they plan for market B2B, right? That was the one bottleneck because the price [indiscernible] first model, which is being launched was a little bit higher side. The acceptability from the market was very poor. Now company is already working to launch new vehicles, which will be competitive in the prices, which is equal to the part of the vehicle, which is being already in the market and company will be soon given that overall information to launch this kind of vehicle, which will be as par of customers.
And same time, we will be doing the indigenization for this hub motor and motor controller because once it will be indigenized, ELI and other [ scheme ] can be managed by Gogoro. So another 3 months' time, we will be in a position to give you the exact figure and overall volume.
Basically, we were not able to give more because the production was -- of Gogoro was not there. So they have produced so far only 5,000 numbers. So basically, it is driven by the OEMs.
So do you see any kind of revenue coming into in FY '25 from this area?
We are expecting. It is totally dependent on the customer as well as -- and from Gogoro.
Okay. And lastly, on the innovation side. So could you also provide an update on the development time lines in the current stage of that USB charger and the gap sensor, which are being developed with technical assistance from the TOYODENSO? Further, what are the new innovations in the products of -- in terms of new development that we are doing right now at our R&D centers, sir?
TOYODENSO, it is being not the new part, it is being developed and already in the market. It is under supply since last 5 years. Wherein we are working for some new projects also, which will be still under discussion with customers.
And what are the new products that we are doing at our R&D centers, apart from these things?
Yes. We'll be working for so many projects like -- especially for the lighting areas only. One is a major thing, which we are planning right now to establish our EMC [indiscernible], which is necessary to have a testing and validation in-house. And there is a head lamp...
So I'll just add on. We are working on 3 main technologies. One is a laser technology, which is the technology of the future and that will go both in 2-wheelers and 4-wheelers and we propose to be the first in the industry to launch that, and we're working very closely with the customer.
Secondly, we are also working on a night vision, which is the need for A segment, B segment and C segment cars. So we are working on that technology along with customers. And third, we are also working on the ambient lighting technology, which is more lightening, which is specific to 4-wheeler. So that is also a new technology that we are working on. So apart from that, we are also working on certain technology, which we cannot disclose at this moment.
Understood, sir. And sir, what is the guidance for FY '25 in terms of top line?
So it is difficult to give a number on this, but we will grow organically in this around 12% to 15% is what we anticipate in the coming year. However, if some targets come across our way, we will capitalize on that. But at this moment, we anticipate 12% to 15%.
Next question is from the line of Gagan Deep from Nvest Analytics Advisory LLP.
Sir, my question is already answered.
Next question is from the line of Viraj from SiMPL.
Congratulations on good set of numbers. Just a couple of questions. First is on the PE part. This new order, which we talk about, if you can just give some more perspective in terms of is it an existing order or it's a new product development, which we back for? And what will be the size of the order? And when do we expect it to commission?
One of the orders that we received for head lamps for European [indiscernible] is a totally new development. We are designing it in here, right? And the development is on. The design has already been approved by the customer. Prototype is under approval. And this development time will take another 6 months for [indiscernible] to be developed. And then we will start the supplier, let's say, in around end of this financial year, we should be starting the supply.
The expected revenue will depend on the offtake from the customer.
Sir, on the Indian OE orders, any update you can give in terms of size of opportunity, when do we expect it to start?
Yes. So we received order from 3 of the Indian customers already. One of the product is under development, and we believe that we should be able to [indiscernible] it fast. In the next 3 months, we will start in a small way for the one small lamp. And then other RFQs we have started receiving and working on that.
So this order is for the head lamp piece? Or is it more on a tail lamp or any color for that you can give that is one. And when you say [indiscernible] how much we are allocating for the 4-wheeler fees?
So this order is for small lamp at this moment, but LED, new technology lamp. And this, we are doing it from our current plant only. We are not investing especially for this business because we have capacity. And this design is complete and approved by customer. The product is under tooling at this moment.
Okay. And sir, on the CapEx piece, when we say INR 250 crores to INR 300 crore CapEx over the next 2 to 3 years, earlier communication was when you look at our existing facility, which is largely for 2-wheelers, we have sufficient capacity to cater to, say, around close to [indiscernible] scheme if the market shifts to LED. Hence, the CapEx expectation for next 2, 3 years at least, was very muted. So when we say this INR 250 crores to INR 300 crores, even for PV, we are not going majorly in a brownfield -- not in [ greenfield ] way. So what are the major components of this CapEx, I mean?
So if you see the current year CapEx is already INR 86 crores. And so if you see organically, if you were to put next 2, 3 years' numbers, you will already be at INR 200-odd crores. So additionally, we built in some more CapEx for expansion at our Hosur plant and also for 4-wheeler that, as I said, is [indiscernible] number, which will be crystalized over the next 6, 9 months. So that's the broad CapEx range we are giving.
Okay. And in terms of the existing 2-wheeler business, sir, if you look at our production -- if you compare the production numbers of, say, HSMI or Yamaha, for last say 3 quarters, our sales performance has been underperforming compared to the production growth you are seeing in those 2 customers. So what explains the underperformance?
I think what you should do is ideally look at more of yearly and see the trend. [indiscernible]
Sir, I am looking at last 3 quarters, so almost a year what I'm looking at.
Yes. So actually, except for the first 2 quarters, last 2 quarters we've done better than their [indiscernible]. But what happens and we explained this last quarter also, sometimes one product for a particular customer [indiscernible] not there. If you look at overall volumes and overall our [indiscernible] and if you look at on a yearly basis, you won't find much of difference there.
Can you give the wallet share, which you used to give earlier in terms of headline payments for the top 4 customers?
Sorry, Viraj. That wallet share actually we tried to work out, but the information [indiscernible] take from the customers as well as from internal sources. So this time, we are not able to do that.
Okay. Just 2 more questions. On the gross margin part and again, on the realization [indiscernible]. So if you look at this particular quarter, we have seen a sharp moderation in our gross margin. So what is it driven by? And on realization, if you see globally, there's a change in technology in LED itself, which has given a drop in realizations across the board. So for us also, are we seeing any similar trends playing out?
So you're specifically questioning on the gross margin? Or you are talking about the EBITDA margin overall?
No. My question one is on the gross margin, sir. Then if I look at this particular quarter, Q4, we have seen a moderation in gross margin, almost 200 basis points year-on-year. What is it driven by?
So if we see the only -- if you see the [indiscernible] sale, even [indiscernible] is the same. The only -- some increase in the manpower, this is a [indiscernible] business. There is no big difference.
So I think I would say...
Yes.
Rather than quarter because what happens, there is always a lag in the customer compensation of the raw material costs. It is always better to see annualized working of [indiscernible]. And if you see that, the gross margin has not changed.
Okay. Just one more question. On the realization part, if you can just give some perspective. Are we seeing any moderation in realization, especially in the [indiscernible] part.
No, I think it is the same. It continues, not because we have back to back [indiscernible] compensation from customers and continue [indiscernible].
Yes, okay. Got it. And on the replacement business, if I look at this business for the last 2, 3 years, we've seen a very healthy growth and given where the market is shifting towards LED. Usually, the replacement cycle is much longer than what one would think. So what explains the growth in replacement business for us?
See, our replacement business is going on the same requirement from this -- whatever the products we are selling earlier. The only difference is that the lighting requirement is no more, because of the LED, it is steady. So even during the current year, we registered a good [indiscernible] in the replacement market [indiscernible].
We're -- as the vehicles become old, the old technology product requirement goes up and therefore, when we supply that, you see the growth in the business. So this is always -- it always happens like that. As the time passes, the lamps get replaced, the bulb technology, not the LED technology. And therefore, you see the growth in our [indiscernible].
Okay. Okay. And any update on the insurance for the [indiscernible].
So this is -- we already informed. We already submitted our claim, and this is under process.
Next question is from the line of Jatin Chawla from RTL Investments.
Just checking on the India PV side, did you say you received orders from 3 customers or was that RFQ?
So we have orders total from 3 customers, and we have RFQ from another 3 customers. So we will, in short time, we'll be working with 6 customers in OEM, including [indiscernible].
Got it. Got it. And on the CapEx side, I don't know why you guys are calling this as a large CapEx because it seems your are already spending INR 80 crores, INR 85 crores every year. So this INR 250 crores to INR 300 crores is the same run rate. So it doesn't seem there is any big pickup in CapEx or you're not seeing kind of growth revenues to invest going forward. So just some understanding on that.
No. So just our maintenance CapEx is more like INR 40 crores, INR 45 crores. So we will be seeing that over and above maintenance, there is some excitement, as we mentioned, there is requirement [indiscernible]. It could be requirement of the [indiscernible] dealer thing at some point in the future. So given that this question has been asked, [indiscernible] guidance, we are giving a number that we think is likely to happen.
Got it. So this INR 250 crores, INR 300 crores, what sort of asset turnover one can expect? What sort of incremental revenue could come from this?
[indiscernible] almost 3x.
Understood. Understood. And this hub motor CapEx that you're mentioning, will this be for beyond Gogoro or this is largely only to service Gogoro needs?
This is as of now is for Gogoro. Further on, once this overall facilities will be ready for [indiscernible], we will work together with Gogoro to cater this hub motor and motor controller to other OEMs also.
Got it. Got it. And this quarter, we have seen some pickup on Yamaha revenues as well. Last few quarters, the run rate was more around INR 70 crores. We have seen this go up to more than INR 80 crores. Any new models that are coming in? Or is this just seasonality where the March quarter was strong?
Yes, there are 2 models, which is being launched during last year. This one [indiscernible] and other models is for export. So those models have given us positive growth and sales figure overall.
And going forward, I think there were a few -- another 5, 6 models, which are going to come. So should we expect that this run rate will continue to go up?
Yes, of course, we are very much hopeful for this, and we are working on that area.
Got it. Got it. And just one last question. So Hero, I think you spoke about the fact that on the Harley side, there is quite a bit of traction. But beyond the Harley and in terms of some of the more mass market models for Hero, are we seeing any kind of orders coming for those as well?
Yes, there will be a few models, which are already being developed and might be next quarter, these models could be launched. And thereafter, we can give you the right picture which modern is being launch and what all kind of product is being developed by us. But there are 6, 7 projects, which are under pipeline. Under Hero model, mass models as well as Hero Harley also.
Next question is from the line of Omkar Arora from [indiscernible] Capital.
Congratulations on a good set of numbers. I have a couple of questions regarding the long-term view of the company. So if we see the sales growth for the company over long term last 8 to 10 years, we've grown at a CAGR of almost 11%. And I understand that we have 4 major revenue stream going forward, which are the 2-wheeler business where we are already catering where we provide lights and mirrors, LED lights within the 2-wheeler segment, new revenue segment where we plan to cater to 4-wheeler segment and new products under our JV with Gogoro. So my question is what kind of growth do we expect in the next 3 to 5 years in each of these revenue streams?
So let's look at organic business. The organic business is going to be when approached by the 4-wheeler industry growth. We've highlighted that we have -- we have a leadership position there. We have a leadership position in the EV segment. We also have indirect exports. So to that extent in the core 2-wheeler segment, we feel optimistic that the growth is coming back. You mentioned last 10 years. Out of that last 5, 6 years have been very tough for the 2-wheeler industry.
So, a, the core organic growth should be stronger. We expect that -- given that the 2-wheeler industry will do well, we should do even better. We should definitely do [indiscernible] 15% of organic growth.
Over and above that, there are several areas which we've highlighted, which we are looking at, including the hub motor business, including the 4-wheeler business and other opportunities that may arise. And I think we are preparing ourselves for those opportunities. So if you look at some of parts between organic and other, we do expect our growth to be much better than what you have witnessed in the past.
We've set ourselves some ambitious targets on that. But some of them are binary and will depend on some of these outcomes, especially on the 4-wheeler and hub motor. And you may have to be patient for a few quarters before they kick in.
So is there any kind of numbers that you can throw on the 4-wheeler segment, in particular, what kind of numbers do you expect to do in the next 1 year, 2 year, and long term, 5 years or so?
So not at this moment. As you are aware, the incubation period for 4-wheeler and [indiscernible]. So we are already getting inroads into the customer that is step one. I think by the end of this financial year, we will be ready with our [indiscernible] business manner we'll share in the numbers [indiscernible].
And what kind of margins do you expect in this segment before we [indiscernible].
What we can see [indiscernible] margins as 2 wheelers. However, the value [indiscernible] because the price range is higher. So that is more on the absolute value and the margins remain similar.
Okay. But don't you think you face the competition in this segment as compared to the segment where you're leaders already? And that is kind of [indiscernible] margins here?
We are preparing accordingly.
Okay. And I have a last question. Can you also provide some details around the total capacity and the current cap utilization and the growth in the coming years, can it be met by the current capacity? Or do we see more capacity coming up in the next few years apart from this financial year as well? So if you can throw a time line of capacity that you must have prepared?
So about the current capacity level, we are around [indiscernible].
In our business, we have a good time for development. And during the meantime of design and development [indiscernible]. So it is -- capacity business and is not a big issue for us.
Next question is from the line of Varun Arora from B&K Securities.
Just some clarifications I want. So previously participant -- one asked, the growth you said 12% to 15%. So that's the revenue growth you're expecting for the FY '25?
Yes. Organic revenue growth, yes.
Organic revenue growth. Okay, sir. And just another thing on the PV Indian OEMs, so you won an order and you said one project is under development out of the [indiscernible]. Is this right understanding, sir? .
Sorry, can you repeat your question, please?
Basically, there are 3 customers you've got the orders from the OEM, Indian OEMs, right sir? And one project is under development, which will come out in the next 3 months. .
Yes. So 3 customers. One is export to India at this moment and 3 additional is [indiscernible].
Okay. And all projects are under development now. I mean, so after 3 months...
The order that we have they are under development, and one product of [indiscernible] customer is shortly timed. I think we should enter into [indiscernible] in next 3 to 4 months.
Okay, sir. Okay, sir. Sir, if I may ask you how big the order is for, I mean, which you got?
So this is a small order at this moment, around INR 10 crores annually, approximately for a full calendar year. But it is more of a beginning to start with the customer.
And you will start the execution in FY '25 only? I mean, the INR 10 crores you are estimating for FY '25?
In the current year, we will start [indiscernible]. Yes.
Okay. And can we say the next year in FY '26, this will grow by the double or triple? And I'm just -- some guidance on that one for FY '26.
Naturally, this will grow. And there are adjacent products for which we are now receiving RFQ because we are developing this product, so this product will get us more products also with the [indiscernible].
Okay, sir. Okay, sir. And sir last clarification I want on the Hero product pipeline. So you said there are 3 products right now under the pipeline.
So there are Hero -- there are 7 products as of now under development. And you could 3 are on tooling side and another 3 is from deriving side. So total, we have a 6 products as of now.
Further on RFQ, we are working on the RFQ also.
Next question is from the line of Jyoti Singh from Arihant Capital Markets.
Sir, I just wanted to understand that the new product that we are working on, that is called ambient [ mood ] lighting. So if you can able to explain how big is this opportunity and we're already having competition in this segment and along with that, a few of the auto ancillary that is already working on it. So how big the opportunity that we have? And what are the target in that?
So thank you for this question. And let me tell you, there is no very well organized [indiscernible] organization today in the country who is serving this market because this is a growing market with the big potential, the ambient [ mood ] lighting [indiscernible] in the cars. Especially all the new EVs have this feature. So we are exploring this market in a very focused manner. We are getting very good response from the customer.
So currently, we are working on 3 RFQs on this because we already could manage to get RFQ from the customer. And we hope to finalize at least one of them in this financial year. And having done that, it will lead to more such businesses. So we see a high potential in this business. And the scope can go up to in, let's say, 3 to 5 years up to INR 500 crores to INR 1,000 crores. I mean that is the kind of opportunity it has.
Okay. And sir, another question on the premiumization side, like now there are a number of vehicles that is upcoming time more in the premium segment. So how we are seeing the increased content per vehicle, if you can explain on that side?
So the trend is, Jyoti, electronics is increasing in all vehicles. The content of electronics is going up exponentially in all the segments and both hardware and software. Related to this, cybersecurity content is also going up because data security is becoming more and more important. So the -- and lighting as such is having a lot of electronics into this. We expect the content to go up in future for all the lighting products.
So currently, sir, we have done any price hikes?
Say again, sorry?
Currently, we have done any price hike in this quarter or we are planning in the upcoming quarter?
Price rise.
Yes.
You're asking about price hike.
Yes, yes.
No, pricing gets settled at a time of development. And once the product is designed, there is no change. It is then only that raw material change, which is pass through and we get compensated by the customer for that. Most of the -- not all of them but most of the customers.
Next question is from the line of [ Rahul Picha ] from [indiscernible].
This is Akshat here. First of all, congratulations on a very good set of numbers. I had 2 questions. So my first question is on the capacity utilization side in our organic business. So if you could just spell out what is the capacity utilization on an average across plants? And how do we look at brownfield expansion given there will be constraints, which you said in the southern part of the country? So that is number one. And I'll follow up with second question afterwards.
So about the current capacity utilization, this is around 80% in the last quarter. And your next question about the capacity enhancement in the south units, we are doing that, yes. We are investing over there.
Okay. And -- so with all these PV orders and RFQs in hand as of now. So we've got already 3 PV orders, which are in tooling and development stage and 3 for RFQ, so while we understand that it will be like a starter for FY '25. But from FY '26 onwards, what kind of a contribution do we expect from these PV orders to our overall revenue, so like do we think that this could be like a 10% of revenue from FY '26 onwards?
So I think it is too early to estimate this. And I think I had just shared a couple of minutes ago. By the end of this year, we will try to crystallize our plan for future. Too early to estimate as of now on the forthcoming revenue.
Next question is from the line of Divyanshu Sachdeva, an individual investor.
Sir, I just had a very basic question. So is it possible for you to give some guidance or maybe some outlook on the 2-wheeler industry going forward, maybe for the next year?
We believe that -- if you look at the last 5 years, we see that we are still not -- we are still below the peak that was in FY '19. So there is no reason why 2-wheeler industry should not grow [indiscernible] very soon. As we mentioned, a little number that the industry looks quite robust. So double-digit growth is something that we definitely expect going forward, not just for the current quarter or 2, but for the next couple of years. We see all the insurance for the 2-wheeler industry to [indiscernible].
Okay. And is it possible for you to share some margin range in your mirror business? Maybe any basic range for that?
Margin specifically for mirror business?
Yes. I mean if there -- is it possible for you to give some range in that segment?
So the market [indiscernible] because we're supplying to same customers.
Next follow-up question is from the line of CA Garvit Goyal from Nvest Analyst Advisory LLP.
Just one question on the margin. Do we see any kind of improvement in margins in FY '25?
So we are already on 13 plus percent. And we definitely will try to level our do best for the improvement of the margin.
Next follow-up question is from the line of Viraj from SiMPL.
Just 2, 3 questions. One is on the PV part again. You talked about 3 confirmed orders, and then you have 3 RFQs. And then there's an export order, which we announced last time. So internally, what milestones you'll be looking at before putting in or committing to a greenfield CapEx?
Committing to a greenfield projects -- CapEx. So at this moment, for this financial year, we do not see any greenfield investment for passenger vehicles. And honestly, I don't see next year also because going forward, we will be targeting one big order, which we anticipate in next financial year, which will lead us to set up a plant. But today, for next 2 years, we will not be investing in greenfield projects for passenger vehicles.
So the existing orders, which we have got was largely be niches or in terms of opportunity scale, there will be like sub INR 50 crore or sub INR 25 crore kind of opportunity scale?
So currently, they are niche orders, and this will be produced in our existing facilities only.
Okay. Got it. Second question was on the 2-wheeler EVs. If we look at the other customers, right, where we in the past have talked about EV players, the major contribution there. If you look at some of our top customers, like, say, Ola and few others, they have seen a very healthy ramp up in volume, and that is continuing. But when I look at our other customer revenue base, it's largely been flat. So what explains the divergence?
You're talking customer-wise business share we share in the [indiscernible], right?
Yes, sir.
So see, we already shared this our 2, 5 customers, it is already there. Rest all somebody has increased, somebody is decreasing, but because our turnover is almost this 10% growth. So because of that percentage that remains similar in the range of 11%.
Okay. Because for [indiscernible].
And if you see the total -- if you also see the total EV industry volumes from '23 to '24, the numbers are from 7 lakh odd to 9.5 lakh EVs. And you are aware that because of various changes to paying subsidy and all, there have been some challenges to a few customers. So for us, we've still grown this price significantly and what Arvind highlighted, as a percentage, it may still look the same 11%, but as an absolute number, we have gained, it appears.
Okay. Just 2 more. When you talk about 6 to 7 projects for Hero, are all these new products or even for some of the existing brands, we will be looking to supply them?
These are all new products.
Okay. Okay. And last one from the Yamaha [indiscernible]. Recently, they came up with the press release and they are moving some of the global models platforms from [indiscernible] to India. So for us, how should we understand the opportunity? Would we be the sole supplier or any color you can give there?
Right, recently you have heard this Aerox 150, which is being launched not only for India and this will be soon starting from here to Indonesia also. So all models, whatever is being compensated right now from VMs are to be made for Indian market as well as for global market also.
No, my question was about existing product brands being moved -- the production being moved from [indiscernible] to India. So in that sense, I was just trying to understand, would we be a beneficiary or...
Yes. We'll be doing, and this has already been working like that [indiscernible]. Whatever products as of now is being made here is being exported to [ Asian ] continues too.
Next question is from the line of Ravi Purohit from Security Investment Management Private Limited.
Most of my questions have been answered. Just one broad question at the company level. I think we've discussed a lot of initiatives over the last 6 months on the call, right, Be it our initiative with Gogoro, new business coming in from passenger vehicles, new RFQs for Hero Harley. And I think we've also mentioned today during the call that we are looking at 12% to 15% growth organically. So if you put all of these together, what kind of number is the company like aspiring to do in terms of revenue over the next 3 to 4 years? Will it be like a difficult task for us to hit INR 4,000 crore revenue in 3 years, 4 years' time?
See we don't [indiscernible] bullish.
There are many opportunities we've seen and we've kind of highlighting them what are these opportunities. How are we working around them. But we don't want to give you a specific guidance number, but organically [indiscernible] there seems to be a large potential.
[Operator Instructions] Next question is from the line of Nikhil from SiMPL.
Just one question, sir. As you said, the total EV volumes are 7 to 9 lakh if you have to understand the total size of the lighting, which the EV volumes would be corresponding to what would be the total size? Would it be like approximately INR 100 crores? Or would it be still lower than INR 100 crores? The total size of lighting, which the EV volumes would be corresponding to?
I think the better way of looking at it is, EV is right now 5% of the total industry at this point of time as well in terms of overall number. And I think picking 1 benchmark number will not be correct per [indiscernible] per EV content is INR 2,000 or INR 3,000 to INR 4,000 because different EVs will be priced differently, especially as this number moves from 5% to higher numbers. So if you want to take a benchmark, you can take INR 2,000, INR 3,000 per vehicle, but that may not be the right way of looking at it because in future, you may have more premium EVs coming or less premium coming.
Correct. So I just wanted to understand what is the approximate size of lighting, which EV is corresponding to today? I'm not trying to any extrapolation for this. But anyways, second question, based on the pipeline and RFQs you are finding in Hero over the next 3, 4 years, do you see Hero can come in, be one of our top 5 customers? Or would you say the pipeline does not give such a confidence? Just some...
We are very much bullish about this, and we will be working together with Hero, not only 7 projects for further projects are although in the pipeline. And we hope this our overall customer range, Hero will be also on the top.
Next question is from the line of Rohan Advant from Prad Capital.
Sir, I just wanted a clarification, when you say 12% to 15% organic growth, what do you mean by organic? Is it just the 2-wheeler business?
Yes. It just means our [ basic trend ] 2-wheeler business and not the new business, which may come significantly, whether it's Gogoro or whether it is the PV business, which we are attending.
Got it. Sir, and in one of your comments, you said that the ambient lighting opportunity could be a INR 500 crores to 1,000 crores opportunity in a few years. So can you elaborate on what that opportunity is? And what are you doing as a company to address that?
Yes, sure. See, each of the new cars, which are coming in, they have this ambient lighting or what we call, [ mood ] lighting. So [ mood ] lighting has an electronic component also, there is a driver which is used to light up the interiors of the car. And this lighting goes not only on the 4 doors, but it also goes on the central console and the dashboard. And this overall package ranges from INR 3,500 to INR 8,000 to INR 10,000. It's good content in per car. So we are working aggressively with our customers to gain this opportunity.
Okay. Okay. And so there, I mean, do you have -- do you have any disadvantage versus the incumbent or it's a new opportunity where you and the competitor would be equally competent to others?
We do not have disadvantage, rather we -- I would say we have advantage of the new technology that we are trying to introduce in ambient lighting. And that is -- will be lined and promoted by our customers. So we feel we are at an advantageous position in this business.
We have a next follow-up question from the line of Jatin Chawla from RTL Investments.
Just a quick follow-up. For this ambient lighting, is this the technology tie-up that we have done or the technology has been developed internally by the company?
So we have developed internally. And wherever required, we are taking support of one of our German agency, wherever required, we are taking its support. But it is developed internally by Fiem Group.
[Operator Instructions] Next question is from the line of Manoj [indiscernible] from [ Kiva ].
Just 2 quick questions. One was for the 12%, 15% growth, what is the underlying 2-wheeler OEM growth that we are assuming?
8% to 10%.
Right. And is that the OEM visibility that we have, they are asking us to prepare for so much?
I mean that is obviously the changes, but this is the current outlook. So we do expect this kind of growth to come through over the next couple of years.
All right. Sir, and earlier we used to talk -- please correct me if I'm wrong, that automotive LED mix will improve and we have a higher margin there. Can you just talk a bit about that? That how the EV mix will improve first and margins will increase there?
See, as this -- you are right, this LED, percentage of the total automotive lighting is increasing as for last year, it was 52% in comparison to the FY '23 where it was 49%.
Right. And...
And about the increasing trend here.
Next 2, 3 years, it is going to touch 75%.
And how much higher gross margins is sir?
See, gross margins are same because it is going to the same customers, but the point is that it will be higher realization.
Right. How much higher realization sir? I think you've spoken about [indiscernible], if you think [indiscernible].
No, no, no. I think you are -- 2x or 3x we are comparing with the conventional versus LED as a realization. Not the higher margin your are refering -- revenue [indiscernible].
[Operator Instructions] As there are no further questions, I would now like to hand the conference over to Mr. Sahil Sanghvi from Monarch Networth Capital for the closing comments.
Just want to thank the management of Fiem Industries for very elaborately and patiently answering all the questions. Also on behalf of Monarch Networth, we thank all the participants for joining the call. Jain sir, would you like to give any closing comments, please.
Yes. Yes, please. I would like to thank everyone for participation in today's conference call. I hope that we have adequately addressed all your queries. If you have any further questions, please don't hesitate to contact us. Thank you, and have a good day.
Thank you. On behalf of Monarch Networth Capital that concludes this conference. Thank you all for joining us, and you may [indiscernible].