Setco Automotive reports 36 pct decline in profit to Rs 7 cr in Q3 FY19

Auto component maker Setco Automotive Monday reported a nearly 36 per cent decline in net profit at Rs 7.22 crore for the third quarter ended December 31, 2018. The company had posted a net profit of Rs 11.27 crore in the period year-ago.

The total sales, however, grew 10 per cent to Rs 160.42 crore during the quarter as compared to Rs 145.65 crore in Q3FY18, the company said in a statement. Despite unanticipated liquidity crisis affecting the medium and heavy commercial vehicle (MHCV) industry sales and production, Setcos sales from original equipment manufacturer (OEM) segment grew by 9.9 per cent while from the aftermarkets segment it grew by 32.2 per cent in the December quarter, the statement said.

"This quarter, the NBFC liquidity crisis has temporarily affected the growth rate of MHCV sector. This is more of a short-term correction, however, the long-term fundamentals remain robust. With the liquidity crisis abating and impending switchover to BS-VI norms, we expect the demand to pick up significantly from the first quarter of the new fiscal," said Harish Sheth, chairman and managing director at Setco Automotive. LavaCast (a subsidiary of Setco) ramped up the capacity utilization to around 70 per cent in the reporting quarter compared to around 60 per cent achieved in the July-September period of the fiscal, the company said.

The capacity utilisation is expected to move up to around 80 per cent during the ongoing quarter of the fiscal, it added. "The growth-friendly measures announced in the budget, coupled with the reduction in interest rates announced recently would give a further flip to the underlying growth drivers of infrastructure and GDP growth," Sheth added.