Setco Automotive Limited (SETCO) AI Stock Analysis

• Market Cap: ₹2.20B
• 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): -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: ₹17.00 ▲(9.40% Upside)
• 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

OEM & aftermarket clutch focus

A concentrated product portfolio focused on clutches for medium/heavy commercial vehicles and dual OEM + aftermarket channels creates a durable revenue base. OEM contracts drive steady new‑vehicle sales while aftermarket demand from the in‑use parc supports recurring sales and export diversification.

Consistent revenue growth

Reported revenue growth of roughly 14% year‑over‑year signals persistent product demand and potential market share gains. Sustained top‑line expansion provides a foundation for scaling fixed‑cost absorption and long‑term recovery of profitability if cost trends stabilize.

EBIT/EBITDA margin improvement

Improving EBIT and EBITDA margins indicate management progress on cost control or operational efficiency. If the trend continues, it can unlock operating leverage, support incremental cash generation, and form the basis for sustainable profit recovery over coming quarters.

Negative Factors

Negative shareholders' equity & high leverage

Negative shareholders' equity and heavy leverage are structural solvency concerns. They constrain access to low‑cost capital, raise refinancing risk, and limit flexibility for capex or restructuring. This heightens long‑term default and liquidity pressures absent sustained earnings improvements.

Negative operating & free cash flows

Persistent negative operating and free cash flows force reliance on external financing, increasing liquidity risk. Structural cash conversion weakness undermines the company’s ability to self‑fund working capital and investment, making long‑term recovery dependent on financing availability.

Sustained net losses and declining gross margin

Ongoing net losses and shrinking gross margins point to structural cost or pricing pressures. Without durable margin restoration, revenue growth alone will not translate into profitability, keeping the business dependent on recapitalization and impairing long‑term free cash flow generation.

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 makes money by manufacturing and selling automotive clutch systems and related components. Its revenue model is mainly product-sales driven and typically includes two core streams: (1) OEM supply, where SETCO sells clutches/assemblies directly to commercial vehicle manufacturers for fitment in new vehicles, and (2) aftermarket (replacement) sales, where it sells replacement clutches and parts used in maintenance and repair through distribution networks and service channels. Earnings are influenced by commercial vehicle production cycles (impacting OEM demand) and the in-use vehicle parc and replacement frequency (supporting aftermarket demand). Information on specific contract terms, customer concentration, pricing mechanisms, or named partnerships is null.

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	7.46B	7.19B	6.41B	5.46B	4.35B	3.59B
Gross Profit	3.58B	2.42B	2.84B	2.24B	1.62B	1.39B
EBITDA	1.23B	1.20B	708.68M	320.39M	-1.36B	-395.06M
Net Income	-1.09B	-1.05B	-1.13B	-1.52B	-2.24B	-1.20B
Balance Sheet
Total Assets	5.51B	5.75B	5.56B	5.74B	6.39B	6.02B
Cash, Cash Equivalents and Short-Term Investments	189.40M	204.90M	139.49M	162.16M	205.07M	152.06M
Total Debt	11.78B	11.16B	9.88B	8.73B	7.60B	4.70B
Total Liabilities	13.31B	12.69B	11.22B	10.05B	8.79B	6.29B
Stockholders Equity	-7.80B	-6.94B	-4.71B	-3.57B	-2.07B	-242.17M
Cash Flow
Free Cash Flow	502.30M	-1.35B	615.42M	356.81M	-1.85B	203.03M
Operating Cash Flow	575.20M	-1.24B	691.68M	475.48M	-1.27B	257.75M
Investing Cash Flow	-19.60M	-64.40M	-71.67M	-109.53M	-979.75M	-167.01M
Financing Cash Flow	-571.80M	1.37B	-643.71M	-403.13M	2.30B	-61.05M

Setco Automotive Limited Technical Analysis

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

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IN:SETCO, the sentiment is Neutral. The current price of 15.54 is below the 20-day moving average (MA) of 16.75, above the 50-day MA of 15.26, and below the 200-day MA of 16.44, indicating a neutral trend. The MACD of 0.54 indicates Positive momentum. The RSI at 49.97 is Neutral, neither overbought nor oversold. The STOCH value of 16.18 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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	₹15.15B	15.60	―	0.32%	0.74%	-17.90%
REMSONSIND	63 Neutral	₹3.17B	20.06	―	0.24%	28.08%	3.19%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
PRITIKAUTO	58 Neutral	₹1.96B	11.02	―	―	26.03%	-10.27%
MUKTAARTS	45 Neutral	₹960.77M	-24.35	―	―	-3.03%	6.44%
SHIVAMAUTO	45 Neutral	₹2.14B	-3.18	―	―	-11.18%	-22.17%
SETCO	43 Neutral	₹2.20B	-1.04	―	―	12.77%	-2.59%

Setco Automotive Limited Corporate Events

Setco Automotive Unit Ordered Shut by Gujarat Pollution Board Over Wastewater Concerns

Setco Automotive has disclosed that the Gujarat Pollution Control Board has ordered the closure of one manufacturing unit of its subsidiary, Setco Auto Systems Private Limited, located on the Baroda–Godhra Highway in Kalol, Gujarat, and directed disconnection of most electricity supply due to alleged wastewater discharge near the River Goma catchment area. The company is reviewing the directive, considering legal remedies, and has sought to reassure stakeholders that its manufacturing operations are run in compliance with applicable environmental laws, signaling potential operational disruption at the affected unit and heightened regulatory scrutiny on its environmental practices.

The inspection by pollution control officials in February led directly to this enforcement action, underscoring the regulatory risks industrial manufacturers face in environmentally sensitive zones. While the financial and production impact has not yet been quantified, investors and other stakeholders will closely watch how quickly Setco can resolve the issue and restore normal operations at the plant, as well as any longer-term implications for its compliance framework and reputation.