Shanthi Gears Shares Fall 5% After Announcing Q3 Results; Check the Details

SYNOPSIS: Shanthi Gears reported lower Q3 FY26 revenue, profit and pre-tax earnings due to weaker order inflows in earlier quarters, along with negative FCF and reduced quarterly performance compared to both sequential and annual levels.

During Friday’s trading session, shares of a company involved in the business of design, manufacture, supply and servicing of gears and gearboxes fell nearly 5 percent on BSE. So, what triggered this sharp decline just a day after a nearly 15 percet surge? Let’s break it down in this article.

At 10:53 a.m., shares of Shanthi Gears Limited were trading in red at Rs. 450.05 on BSE, down by around 5 percent, compared to its previous closing price of Rs. 472.7, with a market cap of Rs. 3,452.6 crores. The stock has delivered negative returns of around 2 percent in the last one year, and has fallen by over 4 percent in the last one month.

Financial Performance for Q3 FY26

Shanthi Gears Limited announced the financial results for the third quarter of FY26 on Thursday, as per the latest regulatory filings with the stock exchanges. For the quarter, Shanthi Gears posted a revenue from operations of Rs. 116.82 crores, reflecting a sequential decline of over 11 percent QoQ compared to Rs. 132 crores in Q2 FY26. Likewise, on a year-on-year basis, revenue decreased nearly 26 percent from Rs. 157.5 crores recorded in Q3 FY25. The drop was mainly on account of lower order bookings in the previous quarters.

Profit After Tax (PAT) for Q3 FY26 stood at Rs. 16.2 crore, indicating a decrease of around 25 percent QoQ from Rs. 21.5 crores in Q2 FY26, as well as a decline on a year-on-year basis by more than 38 percent from Rs. 26.3 crores reported in Q3 FY25. Meanwhile, Profit Before Tax (PBT) declined by 39 percent YoY to Rs. 21.6 crore from Rs. 35.43 crore in Q3 FY25, primarily on account of de-growth in revenue.

Despite near-term pressures, the company reported a Return on Average Invested Capital (ROIC) of 31 percent during the quarter. Free cash flow (FCF) for Q3 FY26 was negative at Rs. 1.72 crore, largely due to capital expenditure undertaken for core machinery.

Order Book, Management Update & More

Operational momentum improved meaningfully during the quarter, with Shanthi Gears recording its highest-ever order booking of Rs. 169 crore, representing a 28 percent growth over Q3 FY25. The unexecuted order book stood strong at Rs. 305 crore as of 31st December 2025.

The Board declared an interim dividend of Rs. 3 per share (300 percent) for FY26, and the record date has been fixed as on Thursday, 29th January 2026, and the dividend will be paid on or before 20th February 2026.

Separately, the Board approved the resignation of Mr. Ranjan Kumar Pati, Chief Financial Officer (CFO), who will step down from his role and as a Key Managerial Personnel (KMP) effective the close of business hours on 19th March 2026, to pursue opportunities outside the company.

Shanthi Gears Limited, a subsidiary of Tube Investments of India Limited (TII), is engaged in the business of design, manufacture, supply and servicing of gears and gearboxes.

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