Mumbai, February 11, 2019: Setco Automotive Ltd. (NSE: SETCO | BSE: 505075), the largest manufacturer of clutches for Medium and Heavy Commercial Vehicles (M&HCV) in India, announced its financial result for the third quarter (Q3 FY19) ended December 31, 2018 and nine months (9M FY19) ended December 31, 2018.
Setco Automotive reported a strong sales of INR 466cr in 9M FY19, up by 33.6% YoY despite a slowdown in the M&HCV segment in Q3. On the back of robust growth and improved operating efficiencies, EBITDA in 9MFY19 stood at INR 67.71cr, up by 82.3% YoY. The company posted Profit after Tax of INR 24.20cr in 9MFY19, up by 84.1% YoY.
The company reported sales of INR 160.42 crore in Q3 FY19, up by 10.1% YoY and EBITDA of INR 23.27 crore in the quarter, up by 6.9% YoY. The company posted Profit after Tax of INR 7.21cr in Q3FY19, down by 35% YoY due to the normal tax rate of 34% applicable in FY19 as compared to ~21% in FY18 (actual rate was ~8% in Q3FY18).
Despite unanticipated liquidity crisis affecting MHCV industry sales and production, Setco’s sales from Original Equipment Manufacturer (OEM) segment grew by 9.9% and sales from Aftermarkets segment grew by 32.2% in this quarter. LavaCast (a subsidiary of Setco) ramps-up its capacity utilization to ~70% utilization in Q3 FY19 vs ~60% in Q2 FY19 and is expected to move up to around 80% during Q4 FY19. Additionally, with the recent inroads into the farm-equipment segment and the introduction of new generation clutches (ASD clutch) in US Aftermarket, the company is poised to grow significantly going forward.
Harish Sheth, Chairman & Managing Director at Setco Automotive, said, “This quarter, the NBFC liquidity crisis has temporarily affected the growth rate of MHCV sector. This is more of a short term correction, however, the long term fundamentals remain robust. With the liquidity crisis abating and impending switchover to BS-VI norms, we expect the demand to pick up significantly from the first quarter of the new fiscal. The growth-friendly measures announced in the budget, coupled with the reduction in interest rates announced recently would give a further flip to the underlying growth drivers of infrastructure and GDP growth.”
About Setco Automotive:
Setco is the largest manufacturer of Premium Quality “LIPE” brand clutches for commercial vehicles in India. Incorporated in May 1982, currently the company employs more than 2000 people globally. It is a Tier I supplier of clutches to all the prominent Indian commercial vehicle manufacturers such as Tata Motors, Bharat Benz, Ashok Leyland etc. Setco has all the required global quality certifications such as TS 16949, ISO 14001, OSHAS 18001 and VDA 6.3.