Synopsis: Small cap company’s shares are in the spotlight today after the company has announced Q2 results.
A small-cap company that is in the business of design, manufacture, supply and servicing of gears and gear boxes is in the spotlight today after posting Q2FY26 results. Read the article below for detailed insights into its performance.
With a market capitalization of Rs. 3,989.22 crore, the shares of Shanthi Gears Limited were closed at Rs. 520, down by 1.3 percent from its previous day’s closing price of Rs. 526.85. The stock has touched an intraday low of Rs. 493.65, implying a downside of 6.3 percent from its previous day’s close price.
Q2FY26 Results
Shanthi Gears Limited reported Rs. 131.91 crore in revenue for the second quarter of FY26, a 14.94 percent decrease over the Rs. 155.08 crore for the same period in FY25. It decreased by 2.21 percent as compared to Rs. 134.89 crore in Q1 FY26.
The company’s EBITDA for Q2 FY26 stood at Rs. 26.52 crore, down by 13.08 percent from Rs. 30.51 crore in Q1 FY26, and declined by 22.36 percent from Rs. 34.16 crore in Q2 FY25.
The consolidated net profit for the second quarter of FY26 was Rs. 21.51 crore, which was 5.2 percent lower than the Rs. 22.69 crore reported in the previous quarter and decreased by 16.07 percent from Rs. 25.63 crore in Q2 FY25. Profit decline was also reflected in earnings per share (EPS), which decreased to approximately Rs. 2.80 in Q2 FY26 from Rs. 3.34 in Q2 FY25.
In Q2 FY26, the company achieved a Return on Average Invested Capital (ROIC) of 46 percent and generated a free cash flow of Rs. 12.68 crore. During the quarter, it booked new orders worth Rs. 138 crore, up 7 percent QoQ, while the unexecuted order book as of 30th September 2025 stood at Rs. 254 crore.
About the company
Shanthi Gears Limited, founded in 1960 and based in Coimbatore, India, designs, manufactures, and services gears and gearboxes for domestic and international markets. Its offerings include helical, bevel helical, worm, extruder, and cooling tower gearboxes, geared motors, and various metal castings. The company also provides installation, refurbishment, and on-site support, serving industries such as steel, cement, sugar, power, mining, paper, rubber, textiles, and aerospace. It operates as a subsidiary of Tube Investments of India Limited.
A return on equity (ROE) of about 25.6 percent and a return on capital employed (ROCE) of about 34.9 percent demonstrate the company’s financial position. At the moment, the company’s P/E ratio is 40x which is higher as compared to its industry P/E 36.2x.
Conclusion
Shanthi Gears Limited fell about 6 percent after its Q2 FY26 results as revenue and profits declined compared to last year and the previous quarter. Revenue stood at Rs. 131.91 crore and net profit at Rs. 21.51 crore, while earnings per share fell to Rs. 2.80. Despite this, the company showed strong cash flow, healthy returns, and steady new orders, reflecting a solid long-term business outlook.
Written By Akshay Sanghavi
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