Setco’s Arduous Road To Recovery

In fiscal year 2019, Setco Automotive stood at the summit of its industry, reporting a peak revenue of Rs 686 crore. As a dominant supplier of clutches to India’s medium- and heavy-commercial vehicle (M&HCV) market, the company seemed well-positioned for sustained growth. Yet, within two years, the ground beneath it had shifted dramatically. A confluence of regulatory shifts and economic disruptions sent the company into a downward spiral, cutting its revenues nearly in half.

The trouble began with a policy adjustment that, at first glance, appeared beneficial to the logistics sector. The Ministry of Road Transport & Highways revised axle-load ...