Setco Automotive (UK) Ltd recently won the ‘People and Skills’ award, sponsored by SMMT Industry Forum, at the Northern Automotive Alliance Annual Business Awards. The company was recognized for its investment in both the training and development of its workforce.
Setco Automotive also received a certificate for being ‘Highly Commended’ under the Manufacturing Excellence Award category, in recognition of its fantastic improvements and implementations in streamlining warehouse operations.
The Northern Automotive Alliance Awards took place in Cheshire on 7th November 2019 and showcased the successes of vehicle manufacturers, supply chain companies, and service providers in the region.
“Setco Automotive Ltd: Drivers of a Successful Turnaround” to highlight Setco’s journey from a financial and operational business perspective to key turnaround factors for the company’s profitability and survivability
Setco Automotive, the largest clutch supplier to the medium and heavy commercial vehicle (MHCV) segment, is planning to expand into the light commercial vehicles (LCV) and farm equipment sectors within the next six months. The company is also exploring the possibility of setting up an assembly plant in Russia. Setco already operates two overseas assembly units, one in Manchester, UK, and another in Nashville, Tennessee, US.
The company operates on a hub-and-spoke model, with its main plant located in Kalol, Gujarat, which supplies to its assembly plants in the UK, US, and Uttarakhand. Setco is currently working with original equipment manufacturers (OEMs) regarding its potential plant in Russia. However, no details on the investment for this project have been disclosed.
In addition, Setco is in the final stages of appointing parts distributors in North America, with the company’s executive director, Udit Seth, planning a visit to the US to finalize the deal. Setco currently supplies nearly 100% of clutch requirements for major players like Tata Motors, Volvo Eicher, and AMW, and meets about 60-65% of Ashok Leyland’s needs. Seth highlighted that nine out of ten clutches used in the MHCV segment are manufactured by Setco.
Setco is aiming to expand its market reach by entering the LCV and farm equipment segments, which would open up a market of 380,000 units per year in the LCV sector and 550,000 units in the tractor segment. The company has been investing approximately ₹30 crore annually in product development and plant upgrades. While the MHCV segment saw some recovery in FY15 with sales of 195,000 units, this remains below the 2011 peak of 240,000 units.
Globally, Setco is working towards becoming part of integrated supplier programs for OEMs, as multinational automobile companies increasingly look for suppliers that can operate across geographies. Being close to the client is essential for Setco, especially since regular servicing is required in the clutch sector. Setco had entered the aftermarket business in late 2013-14 when MHCV sales were slow. This strategic move has proven successful, now contributing nearly 20% of the company’s FY15 revenue of ₹458 crore. Setco has 46 distributors, 4,000 dealers, and 12,000 mechanics across India.
The company has also invested around ₹180 crore in a foundry unit at Kalol, with a capacity of 4,000 tonnes per month. Previously reliant on external sources for castings, Setco now meets its own casting needs and supplies to other OEMs. Looking ahead, the company expects OEM growth in the commercial vehicle space to reach 15-20% over the next three years, with aftermarket demand also expected to see double-digit growth.
Mumbai, August 12, 2010: Setco Automotive Ltd, BSE listed (BSE company code: 505075), a premium automotive clutch manufacturer, has allotted Bonus Shares in the ratio of 1:1 and declared the Unaudited Financial Results for the first quarter ended June 30, 2010, during a meeting of the Board of Directors held on August 12, 2010.
Total Income increased to Rs. 52.21 Cr, a growth of 42.5% compared to Rs. 36.65 Cr in the corresponding previous quarter. EBIDTA improved to 21.0% compared to 17.4% in the corresponding previous quarter.
On a standalone basis, the company’s net profit for the June quarter increased by 120.6% to Rs. 5.25 Cr compared to Rs. 2.37 Cr in the corresponding quarter of the previous year. Net Profit margins enhanced to 10.1% compared to 6.5% in the corresponding previous quarter. As a result, the Earnings per Share for June 2010 (Q1) more than doubled to Rs. 5.95 compared to Rs. 2.69 in the corresponding previous quarter.
Commenting on the financial performance of the company, Mr. Harish Sheth, CMD of Setco Automotive Ltd, said, “The performance for the quarter has been good. The future demand for trucks augurs well for sustaining growth potential for Setco. The introduction of new-age trucks will shift this market towards organized players offering premium branded clutches. With this development, going forward, Setco is geared up to meet the growing market demand.”
