Shanthi Gears Q2 PAT down 27% at ₹15.7 crore

What happened

Shanthi Gears reported a 27 per cent fall in net profit to ₹15.7 crore for the September quarter, down from ₹21.5 crore a year earlier. Revenue fell 3 per cent to ₹128 crore, while order booking reached a record ₹192 crore.

Confirmed

Global impact / market context

Higher depreciation and other expenses squeezed profit even as orders rose, showing costs can offset sales momentum. The record order booking suggests future revenue potential, but converting orders into profit while managing expenses is the key challenge for investors.

Analyst inference

The stock closed at ₹476 on the NSE, down ₹7.75 from the prior close, reflecting investor disappointment with weaker profit and revenue. Negative free cash flow of ₹1.3 crore, which means cash used exceeded cash generated, adds pressure to fund operations and spending.

Analyst inference

What to watch

1. Shanthi Gears reported negative free cash flow of ₹1.3 crore in Q2 FY27, which means cash spent exceeded cash generated. Watch whether this reverses as the ₹436 crore unexecuted order book is delivered. Confirmed
2. Investors should watch whether the company converts its record ₹192 crore order booking into revenue in coming quarters, since orders booked are not yet sales and may carry execution risks. Proposed
3. Watch depreciation, amortisation and other expenses, which the company said hurt profit. If these costs stay high while revenue is flat, profit per sale, that is margin, could remain under pressure. Analyst inference

Evidence

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