Setco Automotive Limited (SETCO) AI Stock Analysis

• Market Cap: ₹1.96B
• Dividend Yield: N/A
• Average Volume (3M): 31.62K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.39
• Revenue Growth: 12.77%
• EPS Growth: -2.59%
• Country: IN
• Employees: 831
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Auto - Parts
• EPS (TTM): -3.79
• Shares Outstanding: 133,767,270
• 10 Day Avg. Volume: 14,606
• 30 Day Avg. Volume: 31,620
• PEG Ratio: 0.37
• Price to Book (P/B): -0.39
• Price to Sales (P/S): 0.37
• P/FCF Ratio: -2.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 43 Neutral
• Price Target: ₹14.50 ▼(-6.69% Downside)
• Action: Upgraded Date: 02/03/26
• Date: Action: Upgraded 02/03/26

The score is primarily constrained by weak financial health—ongoing losses, negative equity, and negative operating/free cash flow indicating elevated solvency and liquidity risk. Technicals show only a mild near-term improvement within a longer-term downtrend, and valuation is pressured by a negative P/E tied to unprofitable operations.

Positive Factors

Consistent Revenue Growth

A 14.11% revenue increase indicates sustained demand and market traction for Setco's products. For 2-6 months outlook, consistent top-line growth supports operational scale, helps absorb fixed costs, and provides a base for margin recovery if management sustains sales across OEM and aftermarket channels.

Focused Product Niche and Diversified Channels

Setco's concentration on clutch systems for medium/heavy commercial vehicles, plus sales to OEMs, aftermarket and exports, creates a defensible revenue mix. The dual OEM/aftermarket model cushions cyclicality in vehicle production and supports recurring demand from the in‑use vehicle parc over the medium term.

Improving Underlying Operating Margins

Sequential improvement in EBIT/EBITDA margins suggests management is extracting operating leverage or reducing costs. If sustained, margin recovery can convert revenue growth into positive operating profits over several quarters, improving cash generation potential and easing pressure on capital structure.

Negative Factors

Negative Shareholders' Equity

Negative equity signals structural solvency stress and constrains financial flexibility. Over the medium term this can limit access to cheaper financing, heighten creditor scrutiny, and force dilutive or disruptive recapitalization actions that undermine strategic execution and supplier/customer confidence.

Weak Cash Generation

Persistent negative operating and free cash flows indicate the business struggles to convert earnings into cash. Reliance on financing to fund operations raises liquidity risk and makes capital expenditure, working capital cycles, and debt servicing vulnerable during downturns or tighter credit conditions.

Sustained Losses and Margin Pressure

Despite revenue gains, falling gross margins and ongoing net losses reflect structural cost or pricing challenges. Without sustained margin recovery, profitability remains elusive, eroding reserves and complicating long‑term plans for investment, debt reduction, or expansion over the next several quarters.

Setco Automotive Limited Business Overview & Revenue Model

Company Description

Setco Automotive Limited manufactures and sells clutches for commercial vehicles in India and internationally. It offers clutch products and systems, pressure converters, and precision components. The company primarily offers its products under the LIPE and Lava Cast brand names. It serves commercial and military trucks, heavy-medium-light-duty trucks, marine, off highway, and agricultural equipment sectors. The company was formerly known as Gujrat Setco Clutch Limited and changed its name to Setco Automotive Limited in November 2005. SETCO Automotive Limited was founded in 1982 and is headquartered in Mumbai, India.

How the Company Makes Money

SETCO generates revenue through multiple key streams. The primary source of income is the sale of automotive components to OEMs, where it supplies critical engine parts that are integral to vehicle performance and efficiency. Additionally, SETCO earns revenue from the aftermarket segment, providing replacement parts to automotive repair shops and dealerships. The company has established significant partnerships with major automotive manufacturers, allowing it to secure long-term contracts and maintain a steady flow of orders. Furthermore, SETCO invests in research and development to innovate new products, which can open additional revenue streams as the automotive industry shifts towards electric vehicles and more advanced technologies.

Setco Automotive Limited Financial Statement Overview

Summary

Revenue has grown (notably 14.11% from 2024 to 2025), but profitability remains weak with sustained net losses and declining gross margin. The balance sheet is highly stressed with negative shareholders’ equity and heavy leverage, and cash flows are problematic with negative operating cash flow and reliance on financing—raising solvency and liquidity risk.

Income Statement

Setco Automotive shows a mixed financial performance. Despite a consistent increase in total revenue over the years, with a notable revenue growth rate of 14.11% from 2024 to 2025, the company has faced persistent profitability challenges. The gross profit margin has been decreasing, and net profit margins are negative due to sustained net losses, indicating ongoing operational inefficiency. The EBIT and EBITDA margins improved in 2025, yet remain below industry standards, highlighting the need for cost optimization.

Balance Sheet

The balance sheet reveals significant financial instability. Setco Automotive has a negative stockholders' equity, indicating a critical financial position and potential solvency issues. The debt-to-equity ratio is concerning due to high total debt and negative equity, which poses a substantial risk. Despite this, the slight increase in total assets may suggest efforts in expansion or asset acquisition.

Cash Flow

Setco Automotive's cash flow situation is concerning, with negative free cash flow growth and negative operating cash flows, particularly in 2025. The operating cash flow to net income ratio is unfavorable, reflecting challenges in converting profits into cash. The reliance on financing cash flow indicates potential liquidity issues.

Breakdown	TTM	Mar 2025	Jun 2024	Mar 2023	Jun 2022	Mar 2021
Income Statement
Total Revenue	7.27B	7.19B	6.41B	5.46B	4.35B	3.59B
Gross Profit	3.50B	2.42B	2.84B	2.24B	1.62B	1.39B
EBITDA	1.22B	1.20B	708.68M	320.39M	-1.36B	-395.06M
Net Income	-1.11B	-1.05B	-1.13B	-1.52B	-2.24B	-1.20B
Balance Sheet
Total Assets	0.00	5.75B	5.56B	5.74B	6.39B	6.02B
Cash, Cash Equivalents and Short-Term Investments	201.90M	204.90M	139.49M	162.16M	205.07M	152.06M
Total Debt	0.00	11.16B	9.88B	8.73B	7.60B	4.70B
Total Liabilities	6.94B	12.69B	11.22B	10.05B	8.79B	6.29B
Stockholders Equity	-6.94B	-6.94B	-4.71B	-3.57B	-2.07B	-242.17M
Cash Flow
Free Cash Flow	0.00	-1.35B	615.42M	356.81M	-1.85B	203.03M
Operating Cash Flow	0.00	-1.24B	691.68M	475.48M	-1.27B	257.75M
Investing Cash Flow	0.00	-64.40M	-71.67M	-109.53M	-979.75M	-167.01M
Financing Cash Flow	0.00	1.37B	-643.71M	-403.13M	2.30B	-61.05M

Setco Automotive Limited Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 15.54
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IN:SETCO, the sentiment is Negative. The current price of 15.54 is above the 20-day moving average (MA) of 14.82, above the 50-day MA of 14.61, and below the 200-day MA of 16.53, indicating a neutral trend. The MACD of 0.16 indicates Negative momentum. The RSI at 48.96 is Neutral, neither overbought nor oversold. The STOCH value of 70.38 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for IN:SETCO.

Setco Automotive Limited Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TALBROAUTO	65 Neutral	₹16.34B	16.49	―	0.32%	0.74%	-17.90%
REMSONSIND	65 Neutral	₹3.78B	21.74	―	0.24%	28.08%	3.19%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
PRITIKAUTO	58 Neutral	₹2.20B	12.10	―	―	26.03%	-10.27%
SHIVAMAUTO	47 Neutral	₹2.60B	-3.82	―	―	-11.18%	-22.17%
SETCO	43 Neutral	₹1.96B	-1.57	―	―	12.77%	-2.59%
MUKTAARTS	43 Neutral	₹1.28B	-7.94	―	―	-3.03%	6.44%