Shanthi Gears lifts operating margin by 4.60 percentage points
Revenue grew faster than expenses sequentially, while a lower tax rate amplified the 59.49% rise in standalone net profit.
Filed 26 Oct 2026, 14:02 IST · Shanthi Gears Ltd (SHANTIGEAR)
Key takeaways
- Standalone revenue grew 10.82% QoQ while expenses rose 4.96%, lifting operating margin by 4.60 percentage points to 17.74%.
- Net profit increased 59.49% QoQ as the tax rate fell 8.22 percentage points, although other income still contributed 15.34% of pre-tax profit.
- The stock fell 1.60% in the initial session despite opening 2.01% higher, with traded volume at 2.05 times the reference level.
Price around the results
Revenue growth translated into sharper operating leverage
Standalone revenue rose 10.82% QoQ to Rs 127.99 cr, while expenses increased only 4.96% to Rs 105.29 cr. That gap lifted operating profit 49.54% to Rs 22.70 cr and expanded operating margin by 4.60 percentage points to 17.74%. Interest was unchanged at Rs 0.11 cr, so financing costs did not alter the quarter's operating improvement.
Lower tax rate aided profit, with other income still material
Net profit rose 59.49% QoQ to Rs 15.71 cr, ahead of the 42.63% increase in pre-tax profit, as the tax rate declined 8.22 percentage points to 22.27%. Other income fell 25.48% QoQ to Rs 3.10 cr but still represented 15.34% of pre-tax profit, making it a meaningful part of reported earnings. Depreciation increased 8.30% QoQ, partly offsetting the operating profit improvement below that line.
Margin was above the Industrials peer median
The 17.74% operating margin was 6.75 percentage points above the 10.99% median among 30 Industrials peers that had reported the quarter. With only Q1FY27 in the supplied trend, the quarter shows a sequential margin recovery from 13.14%, rather than a longer multi-quarter direction.
Initial market response was negative despite a higher open
The stock opened 2.01% higher but was down 1.60% in the initial session, underperforming the broader reference by 2.28%. Volume was 2.05 times the reference level, while the reaction record was not yet complete.
Q2FY27 at a glance
Standalone figures as filed with NSE — filed ahead of third-party databases, not yet independently cross-checked.
| Line item | Q2FY27 | Q1FY27 | QoQ |
|---|---|---|---|
| Revenue | ₹128 cr | ₹115 cr | +10.82% |
| Other income | ₹3 cr | ₹4 cr | -25.48% |
| Expenses | ₹105 cr | ₹100 cr | +4.96% |
| Operating profit | ₹23 cr | ₹15 cr | +49.54% |
| Operating margin (%) | 17.74% | 13.14% | — |
| Interest | ₹0 cr | ₹0 cr | +0.00% |
| Depreciation | ₹5 cr | ₹5 cr | +8.30% |
| Profit before tax | ₹20 cr | ₹14 cr | +42.63% |
| Tax | ₹5 cr | ₹4 cr | +4.17% |
| Net profit | ₹16 cr | ₹10 cr | +59.49% |
| EPS (₹) | ₹2.05 | ₹1.28 | +60.16% |
Operating margin of 17.74% compares with a Industrials sector median of 10.99% across 30 peers that have reported Q2FY27.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | -1.60% | -2.28% |
Volume on the results session was 2.05× its 20-day average.
What to watch
- Whether operating margin holds above 17.74% after the 4.60-percentage-point QoQ expansion.
- Whether the tax rate remains near 22.27%, compared with 30.49% in Q1FY27.
- Whether other income remains a material contributor to pre-tax profit relative to the 15.34% share this quarter.