Check Before You Invest : Shanthi Gears Ltd

Q: Which industry/sub-sector does Shanthi Gears Ltd belong to?

Shanthi Gears Ltd belongs to the Automobiles sector, operating specifically within the Auto Ancillary segment.

Q: Is Shanthi Gears Ltd a good quality company?

Shanthi Gears Ltd is a good quality company, based on a consistently good multi-year financial track record. This assessment is based on company’s performance on Revenue growth, ROCE, Equity and Assets, key margin ratios, cash conversion cycle, and debt to cash flow from operations and how it compares with its long term averages.

Q: Is Shanthi Gears Ltd undervalued or overvalued?

Shanthi Gears Ltd appears Somewhat overvalued, as its key valuation ratios are higher than their past averages. Based on the industry it operates in, the relevant valuation ratios include one of the following, P/E, P/BV, P/Sales, EV/EBITDA or a combination of two or more. Valuation Ratios. Price to Earnings, Current: 44.15, Historic Median: 44.31. Price to Book, Current: 7.69, Historic Median: 9.22. Price to Sales, Current: 6.53, Historic Median: 6.52. EV to EBITDA, Current: 26.79, Historic Median: 28.22

Q: Is Shanthi Gears Ltd a good buy now?

Shanthi Gears Ltd is a neutral opportunity now, based on stable price trend analysis suggesting prices may move sideways. However, you need to check its quality and valuation before making a decision

Q: Revenue growth of Shanthi Gears Ltd?

Shanthi Gears Ltd revenue growth is 12.8% for FY-2025, which is below its 5-year CAGR of 20.07%, indicating slower growth.

Q: Gross Profit margin of Shanthi Gears Ltd?

Shanthi Gears Ltd Gross profit margin which is the profit after deduction of direct costs, is 23.7% for FY-2025, which is in line with its 5-year median of 22.7%, indicating stable margins.

Q: Operating Profit Margin of Shanthi Gears Ltd?

Shanthi Gears Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 21.36% for FY-2025, which is above its 5-year median of 19.13% indicating increasing margins.

Q: Net Profit Margin of Shanthi Gears Ltd?

Shanthi Gears Ltd Net Profit Margin is 15.88% for FY-2025, is above its 5-year median of 15.05%, indicating increasing margins. Profitability Metrics. Gross Profit Margin (%), Current: 23.7, Historic Median: 22.7. Operating Profit Margin (%), Current: 21.36, Historic Median: 19.13. Net Profit Margin (%), Current: 15.88, Historic Median: 15.05

Q: Return on Asset of Shanthi Gears Ltd?

Shanthi Gears Ltd Return on Asset is 20.51%, which is above its 5-year historical median of 17.88%, indicating improved asset utilization efficiency.

Q: Return on capital employed (ROCE) of Shanthi Gears Ltd?

Shanthi Gears Ltd Return on capital employed is 34.89% for FY-2025, which is above its 5-year historical median of 32.21%. The current ROCE is above its estimated weighted average cost of capital (WACC) of 14%, indicating value creation.

Check Before You Invest : Shanthi Gears Ltd

Snapshot

Q.1 Which industry/sub-sector does Shanthi Gears Ltd belong to?

Shanthi Gears Ltd belongs to the Automobiles sector, operating specifically within the Auto Ancillary segment.

Q.2 Is Shanthi Gears Ltd a good quality company?

Shanthi Gears Ltd is a good quality company, based on a consistently good multi-year financial track record.

This assessment is based on company’s performance on Revenue growth, ROCE, Equity and Assets, key margin ratios, cash conversion cycle, and debt to cash flow from operations and how it compares with its long term averages.

Q.3 Is Shanthi Gears Ltd undervalued or overvalued?

Shanthi Gears Ltd appears Somewhat overvalued, as its key valuation ratios are higher than their past averages.

Based on the industry it operates in, the relevant valuation ratios include one of the following, P/E, P/BV, P/Sales, EV/EBITDA or a combination of two or more.

Valuation Ratios	Current	5-year Historic Median
Price to Earnings	44.15	44.31
Price to Book	7.69	9.22
Price to Sales	6.53	6.52
EV to EBITDA	26.79	28.22

Q.4 Is Shanthi Gears Ltd a good buy now?

Shanthi Gears Ltd is a neutral opportunity now, based on stable price trend analysis suggesting prices may move sideways. However, you need to check its quality and valuation before making a decision

Performance Analysis

We have analysed the performance of the company on the following:

How has it performed on generating Profits?
By checking its Revenue growth, Gross, Operating and Net Margins compared to its last 5-year median.
How efficiently has it utilized Capital?
By checking its ROCE, ROA, ROE and its Cash Conversion Cycle.
How is it managing its Debt?
By checking its Debt to Equity and Cash Flow from Operations.

A: What are the trends in revenue and profit margins?

Q.1 Revenue growth of Shanthi Gears Ltd?

Shanthi Gears Ltd revenue growth is 12.8% for FY-2025, which is below its 5-year CAGR of 20.07%, indicating slower growth.

Q.2 Gross Profit margin of Shanthi Gears Ltd?

Shanthi Gears Ltd Gross profit margin which is the profit after deduction of direct costs, is 23.7% for FY-2025, which is in line with its 5-year median of 22.7%, indicating stable margins.

Q.3 Operating Profit Margin of Shanthi Gears Ltd?

Shanthi Gears Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 21.36% for FY-2025, which is above its 5-year median of 19.13% indicating increasing margins.

Q.4 Net Profit Margin of Shanthi Gears Ltd?

Shanthi Gears Ltd Net Profit Margin is 15.88% for FY-2025, is above its 5-year median of 15.05%, indicating increasing margins.

	Current Level	5-year Historic Median
Gross Profit Margin (%)	23.7	22.7
Operating Profit Margin (%)	21.36	19.13
Net Profit Margin (%)	15.88	15.05

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Shanthi Gears Ltd?

Shanthi Gears Ltd Return on Asset is 20.51%, which is above its 5-year historical median of 17.88%, indicating improved asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Shanthi Gears Ltd?

Shanthi Gears Ltd Return on capital employed is 34.89% for FY-2025, which is above its 5-year historical median of 32.21%. The current ROCE is above its estimated weighted average cost of capital (WACC) of 14%, indicating value creation.

Q.7 Return on Equity (ROE) of Shanthi Gears Ltd?

Shanthi Gears Ltd Return on equity is 25.67% for FY-2025, which is above its 5-year historical median of 23.85%, indicating the business is making better use of its shareholders capital.

Q.8 Cash conversion cycle of Shanthi Gears Ltd?

Shanthi Gears Ltd Cash conversion cycle is 82 days, above its 5-year historical median of 76 days, indicating deteriorated working capital management. However, you need to compare this with its peers in the industry.

	Current Level	5-year Historic Median
Asset Turnover (x)	1.29	1.19
ROE (%)	25.67	23.85
ROCE (%)	34.89	32.21
Cash Conversion Cycle	82 days	76 days

C: How much debt does the business have and is it at a sustainable level?

Q.9 Debt to Equity ratio of Shanthi Gears Ltd?

Shanthi Gears Ltd Debt-to-Equity ratio is 0.00, which is lower the industry average of 0.40, indicating lower debt levels in the industry.

Q.10 Debt to cash flow from operations of Shanthi Gears Ltd?

Shanthi Gears Ltd Debt to cash flow from operations is 0, which is at a healthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Shanthi Gears Ltd?

Q.1 Promoter shareholding and pledge status of Shanthi Gears Ltd?

Promoters hold 70.47% of the Shanthi Gears Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Shanthi Gears Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Shanthi Gears Ltd vs industry peers?

Shanthi Gears Ltd revenue CAGR is 20.07%, compared to the industry median CAGR of 11.89%, indicating faster growth and gaining its market share.

Profit Metrics

	Current Level	5-year Industry Median
Revenue Growth (%)	12.8	11.9
Gross Profit Growth (%)	16.3	16.2
Operating Profit Growth (%)	26.5	14.7
Net Profit Growth (%)	17.1	20.1

Operating Efficiency

	Current Level	5-year Industry Median
Asset Turnover (x)	1.29	1.24
ROE (%)	25.67	11.65
ROCE (%)	34.89	13.5
Cash Conversion Cycle (days)	81.92	46

Valuation & price assessment

Q.1 Stock return of Shanthi Gears Ltd over the last decade?

Over the last 9 year(s), the stock has delivered a CAGR of 16.4% based on the current price.

	9Y	5Y	3Y	1Y
Share Price CAGR	16.4%	24.5%	0.2%	-9.5%

Q.2 Valuation ratios of Shanthi Gears Ltd vs historical?

The current P/E ratio of 44.15 is in line with than its historical median of 44.31, indicating that the stock is trading near its historical average valuation.

Q.3 How do the current valuation ratios compare with 5-year historical median and industry numbers?

Valuation Ratios	Current	5-year Historic Median	5-year Industry Median
Price to Earnings	44.15	44.31	28.71
Price to Book	7.69	9.22	2.99
Price to Sales	6.53	6.52	1.35
EV to EBITDA	26.79	28.22	11.85

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Check Before You Invest : Shanthi Gears Ltd

Snapshot

Performance Analysis

Ownership & governance

Peer comparison (industry-wise, mcap)

Profit Metrics

Operating Efficiency

Valuation & price assessment

Check more companies

Check trending companies

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