Shanthi Gears

It’s been four years since the Murugappa group’s Tube Investments took over Shanthi Gears and looks like this is paying off really well and good now. The company which designs and makes gear and gear-boxes posted fantastic numbers for Q1FY17, with the stock price yesterday hitting a new 52-week high at Rs.138.70.

For Q1FY17, the company posted a stellar rise in net profit – up from Rs.1.38 crore to Rs.5 crore (YoY), up 3.5 times and this was on a 12% rise in net sales at Rs.46 crore. What really helped was the cost – total costs were down at 91% of total sales compared to over 99% in previous Q1. Operating profit was at Rs.2 crore, up from Rs.40 lakh. Obviously, overall the lower base effect also helped immensely.

The company’s equity is at Rs.8.17% and EPS was at 60 paise (FV of Re.1/share). It is debt free and has a healthy reserve of Rs.275 crore. Its current order book stands at Rs.88 crore.  Tube Investments holds 70.12% stake in the company.