Shanthi Gears Limited (SHANTIGEAR) AI Stock Analysis

• Market Cap: ₹34.66B
• Dividend Yield: 1.06%
• Average Volume (3M): 2.73K
• Price to Earnings (P/E): 41.8
• Beta (1Y): 1.22
• Revenue Growth: N/A
• EPS Growth: N/A
• Country: IN
• Employees: 490
• Sector: Industrials
• Sector Strength: 72
• Industry: Industrial - Machinery
• EPS (TTM): 2.11
• Shares Outstanding: 76,715,860
• 10 Day Avg. Volume: 1,316
• 30 Day Avg. Volume: 2,726
• PEG Ratio: 2.25
• Price to Book (P/B): 9.00
• Price to Sales (P/S): 6.00
• P/FCF Ratio: 54.59
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 66 Neutral
• Price Target: ₹511.00 ▲(9.48% Upside)

The score is supported primarily by strong fundamentals—high margins, strong ROE, and a debt-free balance sheet—tempered by a recent revenue decline and historically uneven cash-flow conversion. Technical signals are mixed (negative MACD and below longer-term moving averages), and valuation is a meaningful headwind due to the high P/E with only a modest dividend yield.

Positive Factors

High Profitability Margins

Sustained high gross and operating margins indicate structural pricing power and efficient manufacturing. This durable profitability supports reinvestment, funds capex and R&D, and provides a buffer in cyclic downturns, enhancing long-term competitiveness and cash generation.

Debt-free Balance Sheet

A zero-debt capital structure materially lowers financial risk and gives strategic flexibility. Over 2–6 months and beyond, it enables funding for organic growth or cyclical cushions without refinancing risk, improving resilience through industrial cycles and enabling opportunistic investments.

Strong ROE and Equity Growth

Consistent ~24% ROE and steady equity accumulation reflect efficient capital allocation and profitable reinvestment. This durability in returns supports internal funding for expansion, reduces reliance on external capital, and aids compounding shareholder value over time.

Negative Factors

Recent Revenue Decline

A meaningful revenue drop in 2025 signals weakening demand or lost share, which can persist absent corrective strategy. For an industrial manufacturer, prolonged top-line contraction impairs fixed-cost absorption, slows organic growth and limits ability to scale margins sustainably.

Volatile Cash-Flow Conversion

Large year-to-year swings in cash conversion point to working-capital or timing volatility that reduces predictability of free cash flow. This structural variability complicates investment planning, dividend policy and weakens financial resilience despite strong headline profits.

Negative Recent Growth Rates

Negative revenue and EPS growth rates show recent deterioration in top- and bottom-line performance. If persistent, these trends can erode competitive positioning and make it harder to sustain margins, signaling deeper demand or execution challenges that need strategic fixes.

Shanthi Gears Limited Business Overview & Revenue Model

Company Description

Shanthi Gears Limited designs, manufactures, supplies, and services gears and gear boxes in India, the United States, Europe, and internationally. The company provides helical and bevel helical, worm, extruder, and cooling tower gear boxes, as well as geared motors. It also offers gears and pinions comprising spur / helical gears, worm spares, bevel gears, and internal gears; special gearboxes; and iron, iron castings, phosphor bronze, aluminum bronze, leaded bronze, and copper alloy castings. In addition, the company provides installation support, refurbishment, and on-site services; and engages in the exporting activities. Its products are used in steel, cement, paper, sugar, crane and material handling, power, rubber and plastics, off-highway and mining, process, compressor, railway, textile, and aerospace applications. The company was founded in 1960 and is based in Coimbatore, India. Shanthi Gears Limited is a subsidiary of Tube Investments of India Limited.

How the Company Makes Money

Shanthi Gears Limited Financial Statement Overview

Summary

Strong profitability (2025 gross margin ~53%, net margin ~15.9%, EBIT margin ~19%) and a very conservative, debt-free balance sheet with strong ROE (~24%). Offsets are the 2025 revenue decline (~7.1%) and uneven cash-flow conversion (weak in 2024, improved in 2025).

Income Statement

Profitability is strong for an industrial business: in 2025 (annual) gross margin was ~53% and net margin ~15.9%, with operating profitability also solid (EBIT margin ~19%). Revenue has compounded well over the last several years (2021–2024 growth was strong), but 2025 showed a revenue decline of ~7.1%, which is a near-term slowdown to watch. Overall, the earnings profile looks healthy, but growth has become less consistent in the most recent period.

Balance Sheet

The balance sheet is very conservative with zero debt reported across the periods provided, which materially lowers financial risk and adds flexibility through cycles. Equity has grown steadily (from ~2.29B in 2020 to ~4.03B in 2025), and returns on equity are strong at ~24% in both 2024 and 2025. The main limitation is that the data provided does not show liquidity details (like cash/current assets vs. current liabilities), but on leverage and shareholder return metrics, the balance sheet is a clear strength.

Cash Flow

Cash generation is positive and improved meaningfully in 2025 (annual): operating cash flow (~908M) covered net income at ~0.90x and free cash flow was ~664M (~0.73x of net income). However, cash flow quality was weaker in 2024, when operating cash flow covered net income by only ~0.37x and free cash flow conversion was also lower (~0.45x). This indicates some year-to-year volatility in working capital and/or spending, even though the latest year looks much stronger.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	6.01B	6.05B	5.36B	4.46B	3.30B	2.16B
Gross Profit	2.72B	3.20B	1.24B	2.31B	1.51B	1.02B
EBITDA	1.34B	1.29B	1.07B	908.10M	692.20M	350.50M
Net Income	970.60M	960.30M	822.50M	670.50M	424.70M	201.70M
Balance Sheet
Total Assets	0.00	5.04B	4.43B	3.78B	3.41B	3.25B
Cash, Cash Equivalents and Short-Term Investments	1.54B	1.54B	1.07B	1.26B	944.20M	746.70M
Total Debt	0.00	0.00	0.00	0.00	0.00	0.00
Total Liabilities	-4.03B	1.01B	974.90M	747.90M	808.00M	882.90M
Stockholders Equity	4.03B	4.03B	3.45B	3.02B	2.60B	2.37B
Cash Flow
Free Cash Flow	0.00	664.40M	162.50M	476.80M	293.50M	173.70M
Operating Cash Flow	0.00	907.90M	362.50M	629.50M	350.10M	327.70M
Investing Cash Flow	0.00	-380.00M	-123.00M	-261.70M	-164.80M	-203.50M
Financing Cash Flow	0.00	-384.40M	-383.90M	-230.10M	-191.80M	-115.10M

Shanthi Gears Limited Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
AUTOAXLES	68 Neutral	₹28.22B	17.96	―	1.63%	-2.78%	2.55%
SHANTIGEAR	66 Neutral	₹34.66B	41.83	―	1.06%	―	―
JASH	65 Neutral	₹24.43B	31.51	―	0.47%	25.52%	-4.18%
JTEKTINDIA	65 Neutral	₹37.95B	51.26	―	0.49%	4.44%	-25.67%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
PITTIENG	60 Neutral	₹29.65B	23.00	―	0.18%	26.81%	1.06%
GUJAPOLLO	47 Neutral	₹4.72B	-161.04	―	0.48%	4.69%	-124.17%

Shanthi Gears Limited Corporate Events

Shanthi Gears Board Clears Reclassification of Algavista Greentech from Promoter Group

Shanthi Gears Limited’s board has approved the reclassification of Algavista Greentech Private Limited from the promoter group category, after confirming its eligibility under the SEBI Listing Regulations. Algavista Greentech currently holds no shares in the company, and the reclassification, which remains subject to no-objection from the stock exchanges, is largely procedural but clarifies the company’s updated promoter group structure for investors and regulators.

Shanthi Gears Declares Interim Dividend and Announces CFO Exit After Q3 Results Approval

Shanthi Gears Limited’s board has approved the unaudited standalone financial results for the quarter and nine months ended 31 December 2025, which have been subjected to a limited review and made available on the company’s website and through stock exchange disclosures. The board also declared an interim dividend of ₹3 per equity share for the financial year ending 31 March 2026, set a record date of 29 January 2026 with payment due on or before 20 February 2026, and announced that Chief Financial Officer and key managerial personnel Ranjan Kumar Pati will step down effective 19 March 2026 to pursue opportunities outside the company, signaling a forthcoming transition in the finance leadership.

Shanthi Gears Declares Interim Dividend and Announces CFO’s Exit

Shanthi Gears Limited’s board has approved the unaudited standalone financial results for the quarter and nine months ended 31 December 2025 and has released these results to the stock exchanges and on its website, with extracts to be published in regional and English newspapers. The board also declared an interim dividend of Rs 3 per equity share for the financial year ending 31 March 2026, with 29 January 2026 set as the record date and payment to be made on or before 20 February 2026, while announcing that Chief Financial Officer and key managerial personnel Ranjan Kumar Pati will step down effective 19 March 2026 to pursue opportunities outside the company, marking a forthcoming change in the finance leadership for investors and other stakeholders to monitor.

Shanthi Gears Files SEBI Dematerialisation Compliance Certificate for December Quarter

Shanthi Gears Limited has submitted a compliance certificate to the stock exchanges confirming adherence to Regulation 74(5) of the SEBI (Depositories and Participants) Regulations, 2018 for the quarter ended 31 December 2025. The company’s registrar and transfer agent, MUFG Intime India Private Limited, has certified that all securities received for dematerialisation during the quarter were duly accepted or rejected, properly cancelled and mutilated where applicable, and that the depositories were recorded as registered owners within prescribed timelines, underscoring the company’s ongoing compliance with regulatory requirements for share dematerialisation and listing.

Shanthi Gears Secures Approval for Promoter Group Reclassification

Shanthi Gears Limited announced that it has received a no-objection approval from both the National Stock Exchange of India Limited and BSE Limited for the reclassification of Coromandel Engineering Company Limited and Yanmar Coromandel Agrisolutions Private Limited from its promoter group category. This reclassification is part of the company’s strategic efforts to streamline its promoter group structure, potentially impacting its governance and shareholder dynamics.

Shanthi Gears Limited Receives Compliance Warning from NSE and BSE

Shanthi Gears Limited received warning letters from the National Stock Exchange of India Limited and the Bombay Stock Exchange regarding non-compliance with the SEBI regulations on reclassification of promoter shareholders. The company delayed the disclosure of its application for reclassification, which was submitted on October 25, 2025, but only disclosed on November 8, 2025. The exchanges have advised the company to exercise caution and take corrective measures to prevent future lapses, emphasizing the seriousness of compliance with regulatory requirements.