Why Did Shanthi Gears’ Q2 Net Profit Plunge by 16%?
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Synopsis
Shanthi Gears reported a significant 16% decrease in net profit for Q2 FY26, marking a worrying trend for the gear manufacturing company. With revenue also down by 15% year-on-year, investors reacted swiftly to these figures, resulting in stock market volatility. What does this mean for the company's future?
Key Takeaways
- Net profit fell by 16% in Q2 FY26.
- Revenue decreased by 15% compared to the previous year.
- EBITDA dropped by 22% year-on-year.
- Profit margins weakened to 20.2%.
- Stock experienced volatility post-results announcement.
Mumbai, Oct 24 (NationPress) - Shanthi Gears, a prominent player in the gear manufacturing sector and part of the BSE Smallcap index, disclosed a significant 16% year-on-year decrease in its net profit for the September 2025 quarter (Q2 FY26) on Friday.
The Tamil Nadu-based firm reported a profit of Rs 22 crore, down from Rs 26 crore in the same quarter last year (Q2 FY25), as per its filing with the stock exchange.
Furthermore, the company's revenue experienced a decline exceeding 15% year-on-year, falling to Rs 132 crore from Rs 155 crore during the corresponding period of the previous fiscal year.
Shanthi Gears’ earnings before interest, tax, depreciation, and amortisation (EBITDA) stood at Rs 26.6 crore, marking a 22% drop from Rs 34 crore a year prior.
The profit margins also deteriorated, decreasing to 20.2% in the September quarter from 22% in the same quarter last fiscal year.
In light of these disappointing results, the stock of Shanthi Gears experienced notable volatility during Friday’s trading session.
Within 30 minutes of the announcement, the stock hit both its intra-day high and low. It surged to a peak of Rs 539 before plummeting to Rs 494.9.
The previous closing price was Rs 526.5, indicating a nearly 6% decline post-announcement. From its peak, the stock fell over 8%.
By the end of trading, the stock was priced at Rs 520, reflecting a drop of Rs 6.85 or 1.30% on the National Stock Exchange (NSE) on Friday.
According to details on its official website, Shanthi Gears Limited specializes in manufacturing industrial gears, gearboxes, and various power transmission products.
Founded over 50 years ago, the company is recognized for providing tailored solutions and serving key sectors such as steel, cement, and power.
Point of View
It’s crucial to observe the implications of Shanthi Gears’ latest financial results. The significant drop in both profit and revenue highlights potential challenges within the gear manufacturing sector, particularly for companies reliant on core industries. Investors should consider these factors carefully as they navigate the market landscape.
NationPress
24/10/2025
Frequently Asked Questions
What caused the decline in Shanthi Gears' net profit?
The decline in net profit can be attributed to various factors, including reduced demand in core sectors such as steel, cement, and power, alongside increased production costs.
How did the stock react to the news?
Following the announcement, Shanthi Gears' stock experienced significant volatility, dropping nearly 6% after the results were revealed.
What is Shanthi Gears known for?
Shanthi Gears is known for its manufacturing of industrial gears, gearboxes, and power transmission products, with a strong focus on customized solutions.
What are the profit margins for Shanthi Gears?
The profit margins for Shanthi Gears declined to 20.2% in the September quarter from 22% in the same period last fiscal year.
How has the company performed over the years?
Founded over 50 years ago, Shanthi Gears has established itself as a trusted manufacturer in the gear industry, although recent results may raise concerns about future performance.
