The stock has surged around 40% in just two sessions, after hitting a 52-week low last week. It is now around 10% below its record high.
Why is Shanthi Gears stock up?
The sharp rally comes after promoter Tube Investments of India acquired an additional 2.7% stake in Shanthi Gears through block deals.
Following the transaction, Tube Investments’ stake in Shanthi Gears has increased to 73.2%, from around 70.5% previously.
Tube Investments acquired a controlling stake in Shanthi Gears in 2012. Following the open offer, its holding stood at 70.12%, which increased to around 70.5% in 2019 and has now risen to 73.2%.
Shanthi Gears business
Shanthi Gears’ core business involves the manufacture of gearboxes and gear products.
The company operates as part of the Murugappa Group, with Tube Investments as its promoter.
The sharp stock rally comes despite a weak operating performance in the June quarter.
For Q1FY27, Shanthi Gears’ revenue declined 15% year-on-year to ₹115 crore, from ₹135 crore a year ago.
EBITDA fell 52% to ₹15 crore, compared with ₹31 crore in the year-ago period, while the EBITDA margin contracted to 13% from 23%.
The company’s unexecuted order book stood at ₹378 crore as of June 30, 2026.
For FY26, revenue declined 14% to ₹519 crore, compared with ₹605 crore in FY25. EBITDA fell 14% to ₹124 crore from ₹144 crore, while the EBITDA margin stood at 23.9%, broadly stable from 23.8% a year earlier.
The decline in FY26 revenue was attributed to lower order inflows.
Free cash flow also declined to ₹30 crore from ₹75 crore, although the company remains debt-free.
Despite the weak FY26 performance, order inflows gained momentum during the second half of FY26, with the company reporting record order bookings in Q4FY26.
