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Setco Automotive Q3 profit dips 35%

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Mumbai: India’s largest manufacturer of clutches for medium and heavy commercial vehicles, Setco Automotive posted a 10% growth in revenue to Rs 160 crore for the quarter ended December.

However, the tier-1 component manufacturer’s profits took a hit of 35%, falling to Rs 7.2 crore, down from Rs 11.27 crore during the corresponding quarter last year. The company attributed this fall in its profits to higher tax expenses.

The earnings before tax, depreciation, and amortisation (or EBITDA) grew 7% to Rs 23.3 crore even as the EBITDA margin dropped 40 basis points to 14.5%.

“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,” Harish Sheth, Chairman and MD of Setco, said.

The company supplies clutches to commercial vehicles manufacturers like Tata Motors, Bharat Benz, and Ashok Leyland, with Tata accounting for more than half their business.

Source: Economic Times