Setco Automotive Limited (SETCO) AI Stock Analysis

• Market Cap: ₹1.81B
• Dividend Yield: N/A
• Average Volume (3M): 31.62K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.15
• Revenue Growth: 12.77%
• EPS Growth: -2.59%
• Country: IN
• Employees: 831
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Auto - Parts
• EPS (TTM): -1.99
• 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: 38 Underperform
• Price Target: ₹12.50 ▼(-19.56% Downside)

Setco Automotive's overall stock score is primarily impacted by its poor financial performance and bearish technical indicators. The company's negative valuation metrics further contribute to a low score. Strategic restructuring and improved operational efficiency are essential to address these vulnerabilities.

Positive Factors

Consistent Revenue Growth

Sustained top-line growth demonstrates expanding demand for Setco’s products across OEM and aftermarket channels, supporting scale benefits. Over 2-6 months this trend can provide management room to invest in efficiencies, absorb fixed costs, and pursue product or market expansion to stabilize margins.

Diversified OEM and Aftermarket Model

A dual-channel revenue model (OEM and aftermarket) plus export exposure reduces dependence on new vehicle cycles alone. This structural diversification supports steadier cash flow as the in-use vehicle parc drives recurring replacement demand, improving resilience through commercial vehicle production fluctuations.

Improving Operating Margins in 2025

Reported margin improvement signals effective operational actions (cost controls, pricing, mix). If sustained, it indicates potential to close profitability gaps vs peers, converting revenue growth into durable earnings gains and strengthening cash generation over the medium term.

Negative Factors

Negative Shareholders' Equity

Negative equity is a structural solvency red flag that can limit access to capital markets, trigger covenant breaches, and force recapitalization. Without corrective measures, it undermines long-term financial flexibility and constrains investments needed to sustain competitive position over months ahead.

High Leverage and Solvency Risk

Elevated debt against negative equity heightens refinancing and interest coverage risk. Over a multi-month horizon, servicing obligations may crowd out capex and R&D, increase default probability in downturns, and force asset sales or restructuring, impairing long-term operational competitiveness.

Weak Cash Flow Generation

Persistent negative operating cash flow indicates difficulty converting earnings into liquidity, necessitating external financing. This structural cash shortfall constrains working capital and investment, increases reliance on debt, and raises the risk that core operations cannot be sustained without material corrective action.

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

Setco Automotive faces significant financial challenges. Despite revenue growth, profitability issues persist with negative net profit margins and declining gross profit margins. The balance sheet shows critical solvency concerns with high debt levels and negative equity, while cash flow indicates severe liquidity issues.

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	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 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: Negative
• 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 13.70, above the 50-day MA of 14.83, and below the 200-day MA of 16.76, indicating a bearish trend. The MACD of -0.67 indicates Negative momentum. The RSI at 45.84 is Neutral, neither overbought nor oversold. The STOCH value of 52.97 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	₹15.56B	16.26	―	0.32%	0.74%	-17.90%
REMSONSIND	65 Neutral	₹3.79B	23.32	―	0.24%	28.08%	3.19%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
PRITIKAUTO	58 Neutral	₹2.17B	13.12	―	―	26.03%	-10.27%
SHIVAMAUTO	47 Neutral	₹2.83B	-4.92	―	―	-11.18%	-22.17%
MUKTAARTS	43 Neutral	₹1.30B	-8.28	―	―	-3.03%	6.44%
SETCO	38 Underperform	₹1.81B	-1.67	―	―	12.77%	-2.59%