Setco Automotive Ltd., 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 466 Cr. 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 67.71 Cr., up by 82.3% YoY. The company posted Profit after Tax of INR 24.20 Cr. 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 7.21 Cr. 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.” This story is provided by NewsVoir.