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INVESTMENT INSIGHTS

Check Before You Invest : Setco Automotive Ltd

BSE: 505075 NSE: SETCO ISIN: INE878E01021
  |   Sector:  Automobiles   |   Industry:  Auto Ancillary

Snapshot

Q.1 Which industry/sub-sector does Setco Automotive Ltd belong to?
Setco Automotive Ltd belongs to the Automobiles sector, operating specifically within the Auto Ancillary segment.
Q.2 Is Setco Automotive Ltd a good quality company?
Setco Automotive Ltd is a average quality company, based on a somewhat consistent multi-year financial track record.

This assessment is based on company’s performance on Revenue growth, ROCE, Equity and Assets, key margin ratios, cash conversion cycle, and debt to cash flow from operations and how it compares with its long term averages.

Q.3 Is Setco Automotive Ltd undervalued or overvalued?
Setco Automotive Ltd appears Overvalued, as its key valuation ratios are higher than their past averages.

Based on the industry it operates in, the relevant valuation ratios include one of the following, P/E, P/BV, P/Sales, EV/EBITDA or a combination of two or more.

Valuation Ratios Current 5-year
Historic Median
Price to Earnings 834.71 -
Price to Book 4.44 1.95
Price to Sales 292.88 80.96
EV to EBITDA 774.72 -19.11
Q.4 Is Setco Automotive Ltd a good buy now?
Setco Automotive Ltd is a good buy now, based on strong price trend analysis suggesting prices may rise. However, you need to check its quality and valuation before making a decision

Performance Analysis

We have analysed the performance of the company on the following:

  • How has it performed on generating Profits?

    By checking its Revenue growth, Gross, Operating and Net Margins compared to its last 5-year median.

  • How efficiently has it utilized Capital?

    By checking its ROCE, ROA, ROE and its Cash Conversion Cycle.

  • How is it managing its Debt?

    By checking its Debt to Equity and Cash Flow from Operations.

A: What are the trends in revenue and profit margins?

Q.1 Revenue growth of Setco Automotive Ltd?
Setco Automotive Ltd revenue growth is -0.9% for FY-2025, which is above its 5-year CAGR of -69.3%, indicating faster growth.

Q.2 Gross Profit margin of Setco Automotive Ltd?
Setco Automotive Ltd Gross profit margin which is the profit after deduction of direct costs, is -306.4% for FY-2025, which is below its 5-year median of 17.3%, indicating decreasing margins.

Q.3 Operating Profit Margin of Setco Automotive Ltd?
Setco Automotive Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is -417.7% for FY-2025, which is below its 5-year median of 2.86% indicating decreasing margins.

Q.4 Net Profit Margin of Setco Automotive Ltd?
Setco Automotive Ltd Net Profit Margin is -113.75% for FY-2025, is below its 5-year median of -37.73%, indicating decreasing margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) -306.4 17.3
Operating Profit Margin (%) -417.7 2.86
Net Profit Margin (%) -113.75 -37.73

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Setco Automotive Ltd?
Setco Automotive Ltd Return on Asset is -0.87%, which is above its 5-year historical median of -4.73%, indicating improved asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Setco Automotive Ltd?
Setco Automotive Ltd Return on capital employed is -2.22% for FY-2025, which is in line with its 5-year historical median of -2.22%. The current ROCE is below its estimated weighted average cost of capital (WACC) of 14%, indicating value preservation.

Q.7 Return on Equity (ROE) of Setco Automotive Ltd?
Setco Automotive Ltd Return on equity is -1.75% for FY-2025, which is above its 5-year historical median of -11.11%, indicating the business is making better use of its shareholders capital.

Q.8 Cash conversion cycle of Setco Automotive Ltd?
Setco Automotive Ltd Cash conversion cycle is 61 days, above its 5-year historical median of -82 days, indicating deteriorated working capital management. However, you need to compare this with its peers in the industry.
Current Level 5-year
Historic Median
Asset Turnover (x) 0.01 0.01
ROE (%) -1.75 -11.11
ROCE (%) -2.22 -2.22
Cash Conversion Cycle 61 days -82 days

C: How much debt does the business have and is it at a sustainable level?

Q.9 Debt to Equity ratio of Setco Automotive Ltd?
Setco Automotive Ltd Debt-to-Equity ratio is 0.94, which is above the industry average of 0.40, indicating higher debt levels in the industry.

Q.10 Debt to cash flow from operations of Setco Automotive Ltd?
Setco Automotive Ltd Debt to cash flow from operations is -1660.1, which is at a unhealthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Setco Automotive Ltd?

Q.1 Promoter shareholding and pledge status of Setco Automotive Ltd?
Promoters hold 59.25% of the Setco Automotive Ltd, with 94.59% of their stake pledged, indicating high pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Setco Automotive Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Setco Automotive Ltd vs industry peers?
Setco Automotive Ltd revenue CAGR is -69.30%, compared to the industry median CAGR of 11.89%, indicating slower growth and losing its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) -0.9 11.9
Gross Profit Growth (%) 0 16.2
Operating Profit Growth (%) 0 14.7
Net Profit Growth (%) 0 20.1
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 0.01 1.24
ROE (%) -1.75 11.65
ROCE (%) -2.22 13.5
Cash Conversion Cycle (days) 61 46

Valuation & price assessment

Q.1 Stock return of Setco Automotive Ltd over the last decade?
Over the last 9 year(s), the stock has delivered a CAGR of -2.2% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR		 -2.2% 4.4% 53.3% 37.3%
Q.2 Valuation ratios of Setco Automotive Ltd vs historical?
The current P/E ratio of 834.71 is higher than its historical median of , indicating that the stock is trading above its historical average valuation.
Q.3 How do the current valuation ratios compare with 5-year historical median and industry numbers?
Valuation Ratios Current 5-year
Historic Median		 5-year
Industry Median
Price to Earnings 834.71 - 28.71
Price to Book 4.44 1.95 2.99
Price to Sales 292.88 80.96 1.35
EV to EBITDA 774.72 -19.11 11.85

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