Shanthi Gears
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Vista Outlook
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Shanthi Gears Limited is navigating a recovery phase in revenue growth following a contraction, supported by management's focus on adapting to the evolving automotive landscape, particularly with the rise of electric vehicles (EVs). The company's strategic emphasis on enhancing product offerings and value-added services aligns with industry trends that indicate a robust CAGR of approximately 6.76% for the auto ancillaries sector. Despite facing margin pressures due to rising raw material costs, Shanthi Gears is well-positioned to leverage improving pricing power and stable market conditions. Vista's financial outlook reflects a cautious optimism, with revenue growth expected to stabilize and margins gradually improve, albeit under pressure. The balance sheet remains stable, providing a solid foundation for capital allocation. The macroeconomic environment in India, characterized by strong manufacturing activity and favorable liquidity conditions, further supports the company's growth trajectory. Over the next 12-24 months, key opportunities lie in capitalizing on the EV trend and expanding market share, while watchpoints include commodity inflation and geopolitical tensions that could impact margins. Overall, Shanthi Gears presents a compelling investment case, with a target price of approximately 537, reflecting an expected upside of 0.19%
Why We Like This Stock
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Key Parameters
Financial Snapshot
| Actuals | Forecast | ||||
|---|---|---|---|---|---|
| FY24 | FY25 | FY26 | FY27 | FY28 | |
| Revenue (Cr.) | 536 | 605 | 519 | 493 | 525 |
| Profit Before Tax (Cr.) | 108 | 130 | 108 | 79 | 90 |
| PBT Margin | 20.2% | 21.5% | 2080.9% | 16.0% | 17.2% |
| Net Profit (Cr.) | 80 | 96 | 80 | 58 | 67 |
| Earnings Per Share | 10.4 | 12.5 | 10.3 | 7.6 | 8.6 |
Analyst Recommendations
No analyst recommendations available.
Company Overview
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Shanthi Gears Limited designs, manufactures, supplies, and services gears and gear boxes in India, the United States, Europe, and internationally. The company provides helical and bevel helical, worm, extruder, and cooling tower gear boxes, as well as geared motors. It also offers gears and pinions; special gearboxes; and iron, iron castings, phosphor bronze, aluminum bronze, leaded bronze, and copper alloy castings. In addition, the company provides installation support, refurbishment, and on-site services. Its products are used in steel, cement, sugar, crane and material handling, power, paper, rubber and plastics, off-highway and mining, process, compressor, railway, textile, and aerospace applications. The company was founded in 1960 and is based in Coimbatore, India. Shanthi Gears Limited operates as a subsidiary of Tube Investments of India Limited.