Setco Auto Reports Strong Q3 FY25 with 19% EBITDA Growth, Revenue Reaches Rs. 177.3 Crore

Setco Automotive Limited, one of India's largest manufacturers of MHCV clutches, reported a 7.4% year-on-year growth in revenue at Rs. 177.3 crore for the third quarter ended December 31, 2024, driven by strong demand for its high-quality products in the MHCV sector.

The company's EBITDA for Q3 FY25 increased by 19% to Rs. 29.4 crore, compared to Rs. 24.7 crore in the same quarter last year, with EBITDA margin expanding to 16.6%. This improvement was attributed to higher sales, favorable segment mix, and enhanced operational efficiencies at its subsidiary, Lava Cast.

For the nine-month period of FY25, Setco recorded revenue of Rs. 499.8 crore, marking a 9.6% increase from the previous year, while EBITDA grew by 36% to Rs. 68.6 crore. The company's performance was bolstered by increased sales in OES and aftermarket segments, along with the introduction of Setco allied products.

The majority of its ownership is held by private companies, with Setco Engineering Pvt. Ltd. being the largest shareholder, owning 47.9% of the company. The company is led by Harish Sheth, who has extensive experience in the auto component industry. "I'm happy to share that we've had another strong quarter, with solid revenue growth, better profitability, and improved efficiencies," said Harish Sheth, Chairman & MD, Setco Automotive Ltd. He emphasised that the improved EBITDA margin reflects their successful cost optimization efforts and Lava Cast's turnaround.

The company achieved several operational milestones during the period, including receiving the NVB Excellence Award from Tata Motors and the SEEM Award for Energy Management at its UKD plant. Additionally, Setco successfully launched its 'Drive Rewards' program through the Setco Connect app, onboarding over 20,000 mechanics and retailers.

Notably, Lava Cast, the company's subsidiary, demonstrated significant improvement by achieving EBITDA positivity in H1 FY25 and recording its highest quarterly tonnage since 2019. The subsidiary also reported its best-ever rejection rates during Q3 FY25, following the implementation of rigorous quality checks and advanced production processes.

Setco's main competitors are Fuyao Group, Keihin Corporation, Akebono Brake Industry, and ATC Tires. These companies also specialize in manufacturing various automotive components and compete with Setco in the global market.

The company's debt restructuring efforts showed positive results, with banks sanctioning the restructuring of Lava Cast's debt and the withdrawal of the insolvency petition.