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* Winning new business PV segment: In PV segment, successfully delivered the first product for Mercedes. Also received second order for development of headlamp and tail lamp for new project. Company has received 3 order and also having 3 RFQ. Further company also won new business for headlamp solution from high end European car makers from development & design stage where production to start from Q4FY25 at initial level, any fresh capex won’t be required.

* Further, Management expects FY25 topline to grow by 15-20% backed by new launches by OEM increasing revenue share from PV segment. Management also guided a capex of Rs.250cr-Rs300cr over next 2-3 years which is over and above regular maintenance of Rs.40-45cr.

* Outlook:

The stock is driven by continued dominance in the E-2W lighting segment, healthy free cash flow generation, and the addition of new clients, diversification into PV segment (won new order from EU OEM and domestic OEM) and partnership with Gogoro. We expect FIEM to see better than industry growth in coming year backed by product diversification and capacity expansion. We roll forward valuation to FY26 to arrive at TP of Rs 1569 with BUY rating. (18X of FY26E EPS).

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