Shanthi Gears Ltd

Price story Before the numbers, the tape. A stock price moves through four repeating seasons: a flat base (stage 1), an advance (2), a top (3), a decline (4). Where the price sits in that cycle frames everything below.

Shanthi Gears Ltd trades at ₹715, in a downtrend and 43 weeks into that stage. That is +51.2% against its own 200-day average. It sits at 100% of a 52-week range of ₹397 to ₹715. On relative strength it has been ahead of the NIFTY 500 on a trailing-13-week view for 4 straight weeks.

Today the stock is in a downtrend — week 43 of stage 4. At ₹715 it trades +51.2% versus its 200-day average and sits at 100% of its 52-week range (₹397–₹715).

Against the market, two honest reads. Cumulative: over the last 10.5 years the stock moved +765% while the NIFTY 500 moved +267% — ahead of the index over the full window. Recent form: on a trailing-13-week view the stock has been ahead for 4 straight weeks — the ribbon below is that same metric, week by week.

What would end the trend, mechanically: two Friday closes in a row below the 200-day line. That is the exit rule — no debates.

Valuation P/E is the price of ₹1 of annual profit: how many rupees the market pays for each rupee the company earns in a year.

Shanthi Gears Ltd trades at 81.5× P/E, at the pricey end of its own range (96th percentile). Its long-run median P/E is 43.3×, measured across 10.5 years of weekly readings. This places the multiple against the stock’s own record, and says nothing about what the business is worth.

Today's P/E of 81.5× is at the pricey end of its own range (96th percentile), against a long-run median of 43.3× measured over 10.5 years of weekly readings. This is a comparison against the stock's own history — not a claim about what it is worth.

🚨 Why the multiple sits where it does: over the past year annual EPS moved −20.2% against a +27.9% price move — the price outran earnings, pushing the multiple UP its own range.

The price move, decomposed: over 5y, of the +32.1%/yr price move, ~+15.8%/yr came from earnings growth and ~+16.3 pp from the multiple (expanding); over 10y, of the +19.0%/yr price move, ~+12.9%/yr came from earnings growth and ~+6.1 pp from the multiple (expanding). The split is the honest approximate (price return minus earnings growth); it makes the rally itself visible instead of hiding it behind the percentile.

Put together: the multiple is full against its own past, so the story rests on the earnings line underneath it, not the multiple.

Stage: Deteriorating Every business sits somewhere on a fundamental arc, and this page names the spot before anything else. The last twelve quarters of revenue, profit and EPS growth — plus the return the business earns on its capital — are read as curves: Deteriorating (the curves are falling), Turning around (a trough has just formed and the last few quarters lift off it), Improving (the climb off the trough is sustained), Consistent (steadily positive with healthy returns), Topping out (still high but decelerating from the peak). When the curves genuinely disagree the read is Mixed; too little history is No read. CAGR (compound annual growth rate) is the smooth yearly pace that turns the starting value into the latest one — the fairest way to compare growth across different time spans. Read the columns together: if the 1-year number towers over the 10-year, recent growth is running hotter than the long-run trend. A dash means that window is not held, or the base year was a loss (where a growth rate is not meaningful).

Shanthi Gears Ltd reads as deteriorating on its fundamental arc. Deteriorating — revenue, profit and EPS growth are shrinking (revenue growth −16.9% latest against +21.6% at its 12-quarter best), ROCE slipping at 24.1%. The read is built from 12 quarters across 4 curves, on full evidence.

🚨 Why it matters: falling curves mean every cheap-looking ratio below needs a discount for direction.

4-Factor Sector Score

36.4/100 — rank 6 of 7 in Auto Ancillaries - Gears · 94% evidence confidence

Shanthi Gears Ltd scores 36.4 out of 100 against the 7 companies it is compared with in Auto Ancillaries - Gears, ranking 6. Strong business, demanding price: keep it on the quality list, but require either earnings upgrades or valuation compression.

The four contributions add to the total exactly: 3.5 + 18.3 + 3.6 + 11 = 36.4. This is the SAME number shown on the sector comparison — it is computed once, for the whole peer set, and read here.

What would change it: The read weakens if profit growth turns negative or margin improvement reverses while sector-relative strength deteriorates.

Revenue Revenue is the top line: everything the company billed its customers in the period.

Shanthi Gears Ltd reported ₹115 Cr of revenue in the Jun 26 quarter, −14.4% year on year. Over 10 years it has compounded at 12.2% a year. The last full year, FY26, came in at ₹519 Cr. The last four reported quarters add to ₹499 Cr.

FY26 revenue came in at ₹519 Cr (−14.2% on the year), capping 10 years at 12.2% compound. The latest quarter (Jun 26) printed ₹115 Cr, −14.4% year on year.

Pace check: the last four quarters averaged −16.7% growth against the decade's 12.2% — the current year is running slower than its own long-run rate.

Acceleration check: trailing-twelve-month revenue grew −16.9% over the last 4 quarters against −5.0%/yr over the last 8 — rolling over; TTM profit −34.2% vs −13.7%/yr — rolling over.

Operating margin Operating margin is what is left of every ₹100 of sales after running the business, before interest and tax. It is the cleanest read on pricing power and cost control.

Shanthi Gears Ltd's operating margin is 13.1% in the Jun 26 quarter, −9.5 percentage points against the same quarter a year ago. Across 13 fiscal years the operating margin has ranged 12.0% to 27.0%. The current quarter sits inside that band.

The latest quarter's operating margin is 13.1%, −9.5 pp against the same quarter a year ago. Across 13 fiscal years the operating margin has ranged 12.0%–27.0%.

🚨 Why the margin moved: operating margin went −9.5 pp year on year while gross margin went −6.3 pp — the loss came mostly from the gross line: input costs and pricing.

Net profit Net profit is what survives every cost, interest and tax — the number EPS, dividends and book value all grow from.

Shanthi Gears Ltd earned ₹9.8 Cr of net profit in the Jun 26 quarter, −56.6% year on year. Full-year FY26 profit was ₹77.0 Cr. The 10-year compound rate is 15.6%. That is 8.5% of the quarter's revenue. The same quarter a year earlier earned ₹22.7 Cr.

Jun 26 profit was ₹9.8 Cr, −56.6% year on year. On the full year, FY26 printed ₹77.0 Cr (−19.8%), and the 10-year compound rate is 15.6%.

🚨 Why profit moved: revenue contributed −14.4% and the margin −9.5 pp — the quarter was revenue-led despite a thinner margin.

Pace comparison, last four quarters: profit −34.7% vs revenue −16.7%. Profit is growing slower than sales — costs are eating the growth before it reaches the bottom line.

Cash flow — the router The P&L says what was earned; the cash-flow statement says what actually arrived. Operating cash flow (CFO) against profit is the cleanest lie detector in the accounts.

Over the last 3 fiscal years 77% of Shanthi Gears Ltd's reported profit arrived as operating cash — most of the profit is real cash. In FY26 that was ₹70.0 Cr of operating cash against ₹77.0 Cr of profit. After ₹64.0 Cr of capital spending, ₹6.0 Cr was left as free cash.

FY26: operating cash of ₹70.0 Cr against reported profit of ₹77.0 Cr, leaving free cash of ₹6.0 Cr after ₹64.0 Cr of capital spending. Across the last 3 fiscal years the conversion rate is 77% of profit.

Cash-flow readings here are annual — that is the resolution our series carries, so this section moves once a year.

Why conversion sits at 77%: the cash cycle tightened 21 days between FY21 and FY26 — cash that used to wait in the cycle now reaches the bank sooner.

Router verdict: the bigger cash user is investment — capital spending ran 2.4× depreciation over three years, so the next section's job is to check what that build-out is buying.

Where the cash goes Working capital is the cash tied up between paying suppliers and getting paid: debtor days (customers owe), inventory days (stock waits), and the cash conversion cycle (the whole loop, in days of sales).

Shanthi Gears Ltd's cash conversion cycle runs 142 days in FY26, down from 163 days in FY21. Capital spending ran ₹102 Cr over the last 3 years. At FY26 sales of ₹519 Cr each day of that cycle holds about ₹1.4 Cr, so roughly ₹202 Cr sits inside the business at any moment.

FY26: debtors at 81 days, inventory at 168 days — roughly 5.5 months of stock waiting to sell; that is where the cash sits while it waits — for a full cycle of 142 days, tighter than FY21's 163.

The full loop: cash goes out to suppliers and production on day 0; stock waits 168 days to sell; customers pay about 81 days after that; and suppliers themselves are paid at 108 days — netting out to the 142-day cycle.

In money terms: at FY26 sales of ₹519 Cr, each day of the cycle holds about ₹1.4 Cr — so the 142-day loop keeps roughly ₹202 Cr sitting inside the business at any moment.

On the investment side: capital spending of ₹102 Cr over the last 3 fiscal years against ₹42.0 Cr of depreciation — the company is building well ahead of wear-and-tear. Capital work-in-progress stands at ₹26.0 Cr (FY26) — capacity paid for but not yet earning.

The synthesis: the cash is going into capacity, not disappearing into the cycle — the question becomes whether the new capacity earns.

Return on capital Return on capital employed (ROCE) is the profit the whole business earns on all the money in it — equity and debt together. It is the single best test of whether growth creates value or just size.

Shanthi Gears Ltd earns a ROCE of 26% in FY26. That is up from a trough of 5% in FY15. Return on invested capital clears the cost of that capital by +11.5 percentage points, so growth here adds value rather than only size. The wiring behind it is 14.8% net margin on 0.93× asset turns.

FY26 ROCE is 26%, recovered from a FY15 trough of 5% — the full ladder below shows the fall and the climb, undoctored.

Why the return is what it is — the wiring (FY26): 14.8% net margin × 0.93× asset turns × 1.26× balance-sheet leverage ≈ 17.3% on equity. Margin does its share; leverage is modest — this is an earned return, not a borrowed one.

The capstone test — ROIC − WACC: 23.5% − 12.0% = a +11.5 pp spread. The 12.0% is a standing assumption for the cost of capital in India, not a per-stock estimate — read the sign and the size of the spread, not the decimals. A spread this wide means every rupee reinvested creates more than a rupee of value — the engine compounds.

Debt Debt-to-equity says how much of the business is funded by borrowings; interest cover says how many times operating profit pays the interest bill. Low and high, respectively, is the safe corner.

Shanthi Gears Ltd carries ₹0.0 Cr of borrowings against ₹440 Cr of equity in FY26, a debt-to-equity of 0.00. Over 5 years borrowings went from ₹0.0 Cr to ₹0.0 Cr. Capital spending ran ₹102 Cr across the last 3 of those years.

FY26: borrowings of ₹0.0 Cr against equity of ₹440 Cr — a debt-to-equity of 0.00. Over 5 years borrowings went from ₹0.0 Cr to ₹0.0 Cr while capital spending ran ₹102 Cr in just the last 3 — the build-out is being paid for out of cash, not debt.

Ownership Who owns the stock, quarter by quarter: promoters (the controlling owners), foreign and domestic institutions, and the public. Steady accumulation by people close to the numbers is a signal; a quiet register is also an answer.

No holder of Shanthi Gears Ltd moved a full percentage point over the last two years — the register is quiet. Domestic institutions moved −0.3 points over the same window, to 0.2%. The register is read on the four disclosed classes only; nothing is inferred between filings.

The register over the last two years — Foreign institutions: −0.3 points over 8 quarters to 3.1%; Domestic institutions: −0.3 points over 8 quarters to 0.2%; Promoters: +0.0 points over 8 quarters to 70.5%.

Safety line The Z-score estimates how far a company sits from balance-sheet distress — above roughly 3 is safe, below roughly 1.8 is the danger zone. It was built for manufacturers, so it is not applied to banks and lenders.

Shanthi Gears Ltd: the Z-score is not available for this stock, so we say so rather than invent one. It is a distance-to-distress estimate from the balance sheet, not a forecast of failure. The debt, cash-flow and return sections above carry the balance-sheet evidence this page does hold, and each of them states its own reporting date.

The safety line in one sentence: the Z-score is not available for this stock, so we say so rather than invent one.

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