Setco Automotive (SETCO)

Score breakdown: P/E: 0/3 · ROCE: 1/2 · Growth: 0/2 · Dividend: 0/1

Key Financials

Strengths

• Promoter holding of 59.25% provides strong alignment with minority shareholders.
• Latest quarter sales of ₹197 crore and 9.26% sales growth show meaningful scale and a non-shrinking business.
• ROCE of 21.06% suggests the underlying capital base can generate decent returns before interest and exceptional items, leaving room for a possible earnings recovery.
• Revenue of ₹197 crore in a single quarter is large relative to the ₹226 crore market cap, so any margin recovery can create substantial operating leverage.

Concerns

• Net loss of ₹57 crore on ₹197 crore quarterly sales—about a 29% loss margin—is deeply value-destructive.
• P/E of 0.00 and P/B of 4.29 mean no earnings yield and a price far above book value; no margin of safety.
• Profit growth down 76.62%, zero dividend, and Piotroski F-score of 4/9 all point to weak profitability and financial stress.
• Debt/equity is not available, so solvency and interest burden cannot be assessed; this is a major red flag alongside the large loss.

AI Analysis

Setco is an auto-component maker, a business I can understand, but understandable isn't enough. At ₹24.22, the market cap is ₹226 crore, yet reported P/E is zero: no earnings support. The latest quarter shows a net loss of ₹57 crore on ₹197 crore of sales, a nearly 29% loss margin. Paying 4.29 times book value of ₹5.64 for that stream is not value investing; Graham would demand a margin of safety, not a premium for losses. Profit growth is down 76.62%, the dividend is zero, and the Piotroski F-score is only 4/9, warning of weak financial health. The 21.06% ROCE looks encouraging, but with ROE of just 0.53%, something between operating earnings and net income—interest, taxes, or exceptional charges—is destroying shareholder returns. I cannot rely on a pre-leverage return when the bottom line is weak. Sales growth of 9.26% and ₹197 crore quarterly revenue show the business still has scale and operating leverage if margins recover. Promoter holding of 59.25% gives alignment. But the balance sheet risk is unclear because debt/equity is not available. In a loss-making turnaround, the price must offer protection. At 4.29 times book and no earnings, Setco does not. I would need to see cash flows, debt levels, and proof that the loss is temporary before committing money.

Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer