High ROE & high ROCE multibagger auto stock; Board announced 1:1 bonus share – record date inside!

The stock is up by 45 per cent in just 1 year and gave multibagger returns of over 300 per cent in 3 years.

Fiem Industries Ltd was originally incorporated in India as Rahul Auto Private Limited on February 6, 1989, in New Delhi and was founded by Mr. J.K. Jain. It is engaged in the business manufacturing and supply of auto components like automotive lighting. The company enjoys a significant market share for the supply of automotive lighting & signalling equipment and rearview mirrors to Two-wheeler and Four-wheeler OEMs.

The Board of Directors of the company has announced bonus shares in the ratio 1:1 i.e., 1 bonus shares having a face value of Rs 10 for every 1 share held by equity shareholders of the company having a face value of Rs 10 each as of record date.  The company fixed the record date for bonus shares as Wednesday, February 28, 2024.

Fiem Industries Limited, a major supplier of automotive lighting and parts, caters to both two-wheelers (Honda, TVS, etc.), four-wheelers (Tata Motors, Hyundai, etc.), and a rapidly expanding electric vehicle market (Ola, Hero Electric, etc.), having recently added 28 new EV OEMs to its customer list. They also supply global four-wheeler brands like Kubota and Sparex but rely heavily on their top three customers, who contributed 71 per cent of their revenue in FY22. Notably, Fiem Industries is the sole supplier of Ola Electric's key headlamp, taillight, and mirror components.

Today, shares of Fiem Industries Ltd plunged 2.74 per cent to Rs 2,326 per share with an intraday high of Rs 2,428.65 and an intraday low of Rs 2,304. The stock’s 52-week high is Rs 2,587.95 and its 52-week low is Rs 1,420.80.  

The company has a market cap of over Rs 3,000 crore and has delivered good profit growth of 22.6 per cent CAGR over the last 5 years & maintained a healthy dividend payout of 33.8 per cent. In its Quarterly Results and annual results, the company reported positive numbers.

The shares of the company have an ROE of 20 per cent and an ROCE of 27 per cent. The stock is up by 45 per cent in just 1 year and gave multibagger returns of over 300 per cent in 3 years. Investors should keep an eye on this Small-Cap auto stock.