Leading Mid Corporates 2020

Leading Mid-Corporates of India 2020 E - 21 Experts' View Please provide a brief background of the company and its operations. Setco Automotive Limited (SAL) is the flagship company of Setco Group which also includes Lava Cast Pvt. Ltd, and its CSR wing, the Setco Foundation. SAL was incorporated in May 1982 and listed on the BSE & NSE. Setco is the largest manufacturer of MHCV clutches in India. It is a Tier I supplier of clutches to all the Indian commercial vehicle manufacturers such as Tata Motors, Bharat Benz, Ashok Leyland, Mahindra & Mahindra, Volvo – Eicher Commercial Vehicles & has consistently enjoyed a market share of 80- 85% in OE segment for the last 10 years. For most sizes, SAL is the single source of supply & a preferred based on end consumer brand loyalty. Recently, Setco successfully developed a full range of next-gen clutches farm equipment tractors. SETCO Automotive Limited These dual and double clutches in 280 Dia and 310 Dia offer unmatched driver comfort. better mileage and enhanced productivity in various farm operations. This business is targeted to achieve a 3-digit top-line in 3 years. Kindly elaborate on your company’s innovation initiatives. What kind of outcomes have these initiatives helped the company derive? Setco innovates over the full life cycle of the vehicle and offers products and services targeted at different segments. On the strength and capability of our design, development & validation facility (the largest for clutches in India), SAL smoothly transitioned to BS VI clutches and our new set of products meets the challenging requirements of these vehicles. We are confident to continue to maintain our market leadership with 80-85% share leveraging our manufacturing facilities including Lava Cast which supplies critical castings. This backward integrated strategy helps keep us cost-competitive and gear up to sudden spurts in the demands of OE. Leveraging our R&D, Setco is the first Indian clutchmanufacturer to develop the new generation dual and double clutches for farm Tractors. India being the largest manufacturer of farm tractors & with assured supplies from a reliable Indian supplier, the adoption of these clutches will be much faster on even the mid-segment (35-50 HP) thereby offering better productivity and fuel efficiency to the farmers. How has the COVID-19 pandemic impacted business? What are the strategies that the company has deployed to tide over this crisis? OE business witnessed a sharp drop in H2 FY 20 due to destocking of BS IV vehicles. In March COVID-19-related lockdown further aggravated the situation. The business resumed at a slow pace in Q1 of FY 21 & in Q2 we have touched 70% of our last year activity levels. Keeping in mind the upward surge in the automotive market, our facilities are now geared up to deliver growth from Q3 onwards. The lockdown period was utilised to review our costs and efficiencies and prepare ourselves for the new normal. We are now transformed into a lean, safe and efficient organisation geared up to ride the uncertainties of the external environment & exploit all opportunities as and when they happen. Jatinder Gujral Chief Executive Officer On the strength and capability of our design, development & validation facility, SAL smoothly transitioned to BS VI clutches, and our new set of products meets the challenging requirements of these vehicles. Dun & Bradstreet