Setco’s resilient performance despite a challenging environment

Mumbai: Setco Automotive Ltd, the largest manufacturer of clutches for Medium and Heavy Commercial Vehicles (MHCV) in India, announced its financial result for the first quarter (Q1 FY20) ended June 30, 2019.
Setco Automotive reported a sustained performance with sales at Rs 128 crore in Q1 FY20; marginally down by ~7 per cent YoY compared to 17.7 per cent decline in volumes in the MHCV industry, according to the SIAM data.
The company has posted a resilient performance on the back of a strong position with 85 per cent market share in the OEM market and growth in the more profitable aftermarket segment.
Additionally, the company’s operational profitability has improved owing to better cost management, segment mix, and pricing management. Highest ever contribution at 30.4 per cent up by 330 bps, EBITDA stood at 15.8 per cent up by 70 bps and operating PBT up by 60 bps.
Setco has witnessed an increase in market share of its more profitable aftermarket segment driven by both OES (Original Equipment Spare Parts) and IAM (Independent Aftermarket) channels.
The segment, which has been contributing consistently greater than 50 per cent of top-line (58 per cent in Q1 FY20), continues to be Setco’s growth segment. Additionally, the aftermarket segment has been growing for the organized players post GST.