Setco Automotive Ltd., a key manufacturer of clutch systems for commercial vehicles, has reported its consolidated financial results for the quarter ended June 2025. The company posted a net loss of ₹349.2 million, while revenue from operations stood at ₹1.79 billion. The results reflect ongoing challenges in demand recovery, cost pressures, and restructuring efforts across its operations.
Despite a modest revenue base, the company continues to grapple with margin compression and legacy debt, as it attempts to reposition itself in a competitive and evolving automotive landscape.
Quarterly Highlights
- Revenue from operations reached ₹1.79 billion, up 6.4 percent year-on-year
- Net loss widened to ₹349.2 million, compared to ₹312.7 million in the same quarter last year
- EBITDA margin remained under pressure at 4.2 percent
- No exceptional gains or impairments were reported during the quarter
- Earnings per share stood at negative ₹2.84
Segment-Wise Performance
1. OEM Clutch Systems
- Core segment contributed nearly 70 percent of total revenue
- Demand from commercial vehicle OEMs remained subdued due to inventory adjustments and delayed fleet replacement cycles
- Pricing pressures and high input costs impacted gross margins
2. Aftermarket And Exports
- Aftermarket sales showed marginal improvement, supported by rural freight activity
- Export volumes remained flat, with limited traction in Southeast Asia and Africa
- Currency fluctuations and logistics costs affected profitability
3. Engineering And Foundry Operations
- Foundry division operated at sub-optimal capacity due to weak order inflows
- Operational inefficiencies and overhead absorption challenges persisted
- Strategic review of non-core assets is underway
Cost Structure And Operational Challenges
- Raw material costs rose 8.1 percent year-on-year, driven by steel and alloy price volatility
- Energy and fuel expenses remained elevated due to grid dependency and diesel usage
- Employee costs were stable, but restructuring-related provisions added to expenses
- Finance costs increased due to high-interest debt and working capital borrowings
Strategic Developments And Restructuring Measures
- Setco Automotive is pursuing asset monetization and debt restructuring to improve liquidity
- The company is exploring joint ventures for technology access and market expansion
- Operational streamlining and plant-level automation initiatives are in progress
- No major capex was undertaken during the quarter, with focus on cost containment
Market Position And Shareholder Metrics
- Promoter holding stood at 53.6 percent, with partial pledging of shares
- The stock has declined 18.3 percent over the past 12 months, reflecting investor caution
- Market capitalization stood at ₹2.1 billion as of August 2025
- No dividend was declared for the quarter
Outlook For FY26
Setco Automotive faces a challenging road ahead in FY26, with recovery dependent on commercial vehicle demand, cost rationalization, and successful execution of its turnaround strategy. The company’s focus on operational efficiency, aftermarket expansion, and strategic partnerships will be critical to restoring profitability and shareholder value.
While the June quarter results underscore persistent headwinds, management remains committed to restructuring and repositioning the business for long-term sustainability.
Sources: Reuters, Setco Automotive Ltd. Investor Disclosures, Business Line.
