‚Äč

Setco to invest Rs 300 crore towards clutch production capacity expansion

The Mumbai-based auto components-maker, which claims to enjoy 85 per cent market share in the domestic MHCV (medium heavy vehicles) clutch segment, also expects to grow at about 20 per cent in FY20, he said.

By: | Published: April 2, 2019 12:00 PM

Setco Automotive, the third largest clutch manufacturer for the commercial vehicles, plans to invest Rs 300 crore over the next three years to ramp up capacity and other activities, chairman Harish Sheth has said. The Mumbai-based auto components-maker, which claims to enjoy 85 per cent market share in the domestic MHCV (medium heavy vehicles) clutch segment, also expects to grow at about 20 per cent in FY20, he said.

With four manufacturing facilities at Kalol in Baroda and Sitarganj in Uttarakhand and one each in the US and Britain, Setco lists Tata Motors, Ashok Leyland, Bharat Benz,Mahindra & Mahindra and Volvo-Eicher as major clients supplying clutch discs and clutch covers. Besides, the company has two R&D centres in Baroda and Britain besides a foundry in Baroda.

"Over the next three years, we will be investing over Rs 300 crore to rap up capacity and in other activities," Sheth told PTI during a plant visit to Kalol over the weekend.Of this, Rs 120 crore will be invested in the foundry subsidiary LavaCast, and Rs 150-160 crore will be invested in other activities, including capacity expansion, setting up of a heat treatment and press shop, among others, chief executive JS Gujral said.

"This investment is for over three years starting with Rs 50-60 crore in FY20 and then scaling it up in the subsequent years," he added.On the market outlook, Sheth said the first quarter of FY20l will be mutedm "but we expect good pick up from the second quarter ahead of the BS-VI introduction from next April which will push up vehicle prices. So, we expect higher demand this fiscal year."

Sheth also expects to close FY19 with over 20 per cent growth, which will be better than the industry average. He said the higher growth of auto industry in the past few years would lead to better growth for him in the replacement market as these vehicles come of out the three-year warranty period. "This will lead to demand for clutches in a bigger way. So we expect good growth in the next seven to eight years for the after-market."The company had reported around Rs 8 crore net income on a revenue of Rs 160 crore in the December 2018 quarter. Recently, the company also made foray into the farm equipment sector with clutches for tractors.

Do you know What is Automated Manual Transmission (AMT), Electronic Brakeforce Distribution (EBD), Anti-Lock Braking System, Power Steering? FE Knowledge Desk explains each of these and more in detail at Financial Express Explained. Also get Live BSE/NSE Stock Prices, latest NAV of Mutual Funds, Best equity funds, Top Gainers, Top Losers on Financial Express. Don’t forget to try our free Income Tax Calculator tool.

Get the latest cars price and upcoming bikes price in India exclusively at Financial Express. Stay tuned for new cars and bikes reviews, follow us on twitter, Facebook and subscribe us on YouTube for latest auto news.

Next Stories
1OnePlus to launch a car, BMW paint that charges batteries using moonlight: Best of April Fool’s Day 2019
2Renault Captur updated with new safety features: Launched in India at Rs 9.5 lakh
3India seeks Lithium from South American nations to meet Solar Energy and Electric Vehicles Target