Setco Automotive Limited, an Indian manufacturer of MHCV clutches, announced its unaudited financial results for the quarter and nine months ending December 31, 2024. The company reported year-over-year revenue growth of 7.4% for the quarter and 9.6% for the nine months, driven by strong demand and operational efficiencies. Setco attributed the positive results to higher sales, a favorable product mix, cost-saving initiatives, and the turnaround of its Lava Cast foundry.

Setco's performance in Q3

Setco's revenue for the third quarter of fiscal year 2025 reached INR 177.3 crore, compared to INR 165.1 crore in the same period last year. This 7.4% growth is primarily attributed to the robust demand for Setco's products and its ability to meet evolving customer needs in the MHCV sector. Earnings before interest, taxes, depreciation, and amortization (EBITDA) for the third quarter of fiscal year 2025 reached INR 29.4 crore, a 19% increase compared to INR 24.7 crore in the same quarter of fiscal year 2024. This improvement is attributed to higher sales, a favorable segment mix, and improved operational efficiencies at Lava Cast.

First nine months of FY25 growth record

The company's nine-month revenue totaled INR 499.8 crore, a 9.6% increase from INR 456.0 crore in the corresponding period of the previous fiscal year. This growth is attributed to increased sales in original equipment sales (OES), the aftermarket, and the introduction of Setco allied products.

The EBITDA margin for the quarter stood at 16.6%. For the nine months ended December 31, 2024, EBITDA reached INR 68.6 crore, a substantial 36% increase compared to INR 52.8 crore in the same period last year. This growth stems from a favorable sales mix, ongoing cost-saving initiatives, and the successful turnaround of Lava Cast. The nine-month EBITDA margin was 13.7%.

Achievements and initiatives

Setco achieved several notable business milestones during the reporting period. The company received the NVB Excellence Award from Tata Motors and an award from SEEM for Energy Management at its UKD plant. Setco also successfully launched additional products, including center bearings, under its Setco Allied Products line.

Further enhancing its customer engagement, Setco introduced the 'Drive Rewards' program through its mobile app, Setco Connect. Over 20,000 mechanics and retailers have joined the program since its launch. Addressing its financial restructuring efforts, Setco secured the restructuring of Lava Cast's debt, leading to the withdrawal and dismissal of the insolvency petition against the foundry.

"I'm happy to share that we've had another strong quarter, with solid revenue growth, better profitability, and improved efficiencies. Our revenue grew by 9.6% YoY in the nine-month period for FY25, and EBITDA jumped 36.0%, reflecting the strong demand for our products and our ability to keep up with evolving customer needs in the MHCV sector," stated Harish Sheth, Chairman & MD of Setco Automotive Ltd.

Lava Cast, a crucial part of Setco's operations, achieved several significant operational improvements. The foundry turned EBITDA positive in the first half of the fiscal year and reached its highest quarterly tonnage since 2019.