Shanthi Gears Q2 FY26 Results: Profitability Takes a Hit Amid Softer Demand

Shanthi Gears Limited, a subsidiary of Tube Investments of India (Murugappa Group), reported a muted performance in Q2 FY26, with both revenue and profit witnessing a decline amid challenging demand conditions. The company’s net profit fell 16% year-on-year to ₹21.5 crore, compared to ₹25.63 crore in the corresponding quarter of FY25. The subdued earnings reflect pressure on order execution and softer industrial activity in key segments during the quarter. Revenue from operations came in at ₹132 crore, marking a 15% YoY decline from ₹155 crore last year. This contraction in topline was primarily due to lower dispatches and moderation in customer off-take from core industries such as cement, steel, and power. Consequently, earnings per share (EPS) also fell to ₹2.80 from ₹3.34 in the previous year’s same period, mirroring the drop in profitability. Despite the near-term slowdown, Shanthi Gears maintained operational discipline and continued to strengthen its order pipeline. The company booked new orders worth ₹138 crore during Q2 FY26, registering a 7% YoY increase, signaling continued customer confidence in its product portfolio. The unexecuted order book stood at ₹254 crore as of September 30, 2025, providing revenue visibility for the coming quarters. Notably, the firm achieved an impressive Return on Average Invested Capital (ROIC) of 46%, reflecting its efficient capital allocation and strong business fundamentals. It also generated free cash flow of ₹12.68 crore during the quarter, underlining its ability to sustain positive cash generation even in a slower revenue environment. Shanthi Gears’ stock dropped over 6% to ₹493.65 on October 24, hitting a three-month low following the announcement of results. Investors reacted to the dip in earnings, although the company’s robust order inflow, healthy balance sheet, and consistent focus on innovation and operational efficiency continue to reinforce its long-term growth prospects.