Setco Automotive
Setco Automotive is a premier manufacturer of clutch products for the Automotive and hydraulic products for Construction Equipment Industry. In addition Setco also manufactures precision engineering components like complex and deep drawn pressings and forgings and castings that are machined and heat treated.
Setco UK is also the R&D hub for Setco’s clutch products and the technology provider to the group globally. Setco USA is the R&D hub for the hydraulics products.
Setco Automotive posted stellar performance for quarter as well as FY11 with a consolidated turnover of Rs.352.91 crores in FY11, a growth of 36 per cent Y-o-Y while the to-line grew by 61 per cent Y-o-Y in Q4FY11. Even on a stand-alone basis the performance of Setco in FY11 was pretty good – topline grew by 30.5 per cent and bottom line increased by 55 per cent over FY10. Consolidated profits of the company grew by 134% to Rs. 33.5 crores in FY11 mainly due to the demand for advanced products that are compliant with BS-III norms. Also the UK and US plant have achieved break even and will add to the company’s profitability going forward
The Auto Industry has grown by about 25% in FY10 and around 27% in FY11. On the whole 17.3 million vehicles where sold in India in FY11 over 13.6 million vehicles in FY10. This shows the strong demand for vehicles in India. Going forward this demand is expected to continue (but the growth rate will slow down due to a higher base) thus boosting higher demand for auto components. Setco Automotive has major OEM’s in its long list of clients which includes Tata Motors, Ashok Leyland, Asia Motor Works, Eicher, Komatsu, Man, etc. for the Prima range of M&HCV’s of Tata Motors Setco is the only supplier of clutches. The company is also working with Daimler for manufacturing and selling clutches for Daimler’s Indian operations.
PAT margins are around 9.3 per cent, ROE and ROCE is 31 and 24 per cent and working capital management is good. However, the company has a Debt Equity ratio of 1.39 and Interest Cover of 3.87. Promotor’s stake is 63.52 per cent while Institutional stake is 2.60 per cent in the company.
Considering a PE of 8.72, dividend yield of 2.46 per cent and increasing turnover and profits the company looks good.
No comments:
Post a Comment