Shanthi Gears Profit Falls 26% as Q2 Revenue Declines

Shanthi Gears Reports 26% Profit Decline in Q2 FY27

Shanthi Gears reported a 26% year-on-year decline in consolidated net profit to Rs 15.71 crore for the second quarter of fiscal year 2027 (Q2 FY27). The decrease came alongside lower operational revenue and continued cost pressures. Revenue from operations fell 2.97% to Rs 127.99 crore from Rs 131.91 crore in the corresponding quarter of the previous fiscal year. Including other income of Rs 3.10 crore, total income reached Rs 131.09 crore, compared with Rs 137.85 crore in Q2 FY26. The results indicate that the company's profitability weakened as revenue contracted and expenditure remained elevated.

Revenue Declines as Expenses Remain Elevated

Shanthi Gears' operating performance in Q2 FY27 reflected a combination of lower revenue and sustained expenditure. Total expenses increased to Rs 110.88 crore from Rs 109.17 crore in the year-ago quarter, despite the decline in revenue from operations. Raw material consumption costs stood at Rs 61.61 crore, compared with Rs 61.50 crore in Q2 FY26. The increase in total expenditure alongside lower operational revenue contributed to a reduction in profitability. Profit before tax fell to Rs 20.21 crore from Rs 28.68 crore in the corresponding period of the previous fiscal year, highlighting the pressure on earnings during the quarter.

Record Quarterly Order Booking Reaches Rs 192 Crore

Despite the decline in quarterly profit and revenue, Shanthi Gears reported its highest-ever quarterly order booking of Rs 192 crore in Q2 FY27. The company said this represented a 37% increase compared with Q2 FY26. Its unexecuted order pipeline stood at Rs 436 crore as of September 30, 2026. These figures provide a separate measure of business activity alongside the reported quarterly financial performance. However, order booking and the unexecuted pipeline are not the same as recognized revenue or realized profit. The pace at which the company executes outstanding orders will determine how this pipeline translates into revenue over subsequent reporting periods.

First-Half FY27 Revenue and Profit Also Decline

For the first half of fiscal year 2027, ended September 30, 2026, Shanthi Gears recorded operational revenue of Rs 243.48 crore, down 8% from Rs 266.80 crore in H1 FY26. Net profit for the six-month period declined 42% to Rs 25.57 crore, compared with Rs 44.20 crore in the corresponding period of the previous fiscal year. Total expenses for H1 FY27 were Rs 216.36 crore, slightly below the Rs 217.21 crore reported in H1 FY26. The half-year results show that the reduction in revenue coincided with a substantial decline in net profit, even as aggregate expenses edged lower.

Q2 FY27 and H1 FY27 Financial Performance

The company's quarterly and half-year figures show declining revenue and profitability alongside strong reported order booking. The following comparison summarizes the financial measures disclosed for Q2 FY27 and H1 FY27 against their respective prior-year periods. Quarterly figures relate to the three months of Q2, while the H1 figures cover the six months ended September 30, 2026. Amounts are expressed in crore rupees, and percentage changes are based on the year-on-year comparisons provided in the reported results.

Industry Impact & Outlook

Shanthi Gears' results highlight the distinction between securing new orders and converting business activity into reported earnings. Record quarterly order booking and a Rs 436 crore unexecuted pipeline provide evidence of incoming and outstanding orders, while declining revenue and profit underscore the importance of execution and cost management. For industrial gearing suppliers and their customers, the company's subsequent performance will depend in part on how outstanding orders progress into recognized revenue and whether profitability improves. The available results do not establish when the order pipeline will be converted or whether margins will recover. Future financial disclosures will be important for assessing whether stronger order intake can offset the recent weakness in earnings.

Frequently Asked Questions

How much did Shanthi Gears' net profit decline in Q2 FY27?
Shanthi Gears reported consolidated net profit of Rs 15.71 crore in Q2 FY27, representing a 26% year-on-year decline. The company attributed the weaker performance to lower operational revenue and sustained cost burdens. Revenue from operations decreased 2.97% to Rs 127.99 crore from Rs 131.91 crore in the year-ago quarter. Total expenses also increased, reaching Rs 110.88 crore compared with Rs 109.17 crore. These factors coincided with a decline in profit before tax to Rs 20.21 crore from Rs 28.68 crore in Q2 FY26.

What was Shanthi Gears' revenue in Q2 FY27?
Shanthi Gears recorded revenue from operations of Rs 127.99 crore in Q2 FY27, down 2.97% from Rs 131.91 crore in the corresponding quarter of the previous fiscal year. Total income, including other income of Rs 3.10 crore, amounted to Rs 131.09 crore, compared with Rs 137.85 crore in Q2 FY26. The figures indicate a decline in both operating revenue and total income. The company's reported results also showed that total expenditure increased during the quarter, contributing to pressure on profitability despite the relatively smaller decrease in operational revenue.

What were Shanthi Gears' order booking and order pipeline figures?
Shanthi Gears reported its highest-ever quarterly order booking of Rs 192 crore in Q2 FY27, a 37% increase compared with Q2 FY26. The company's unexecuted order pipeline stood at Rs 436 crore as of September 30, 2026. These figures indicate strong order intake during the quarter and a substantial volume of outstanding orders awaiting execution. However, order booking and the order pipeline do not automatically translate into revenue or profit in the same reporting period. The timing of execution and recognition will be important in evaluating the financial contribution of these orders.

How did Shanthi Gears perform during the first half of FY27?
Shanthi Gears recorded operational revenue of Rs 243.48 crore for the first half of FY27, down 8% from Rs 266.80 crore in H1 FY26. Net profit declined 42% to Rs 25.57 crore from Rs 44.20 crore in the corresponding period of the previous fiscal year. Total expenses were Rs 216.36 crore, compared with Rs 217.21 crore a year earlier. The half-year figures show that expenses edged lower, but this reduction coincided with weaker revenue and a substantial decline in net profit. The results cover the six months ended September 30, 2026.

Why did Shanthi Gears' profitability come under pressure in Q2 FY27?
Shanthi Gears' profitability came under pressure as operating revenue declined while total expenditure increased during Q2 FY27. Revenue from operations fell to Rs 127.99 crore from Rs 131.91 crore, whereas total expenses rose to Rs 110.88 crore from Rs 109.17 crore. Raw material consumption costs were Rs 61.61 crore, compared with Rs 61.50 crore in the prior-year quarter. Against this background, profit before tax decreased to Rs 20.21 crore from Rs 28.68 crore. The reported figures demonstrate the combined effect of lower revenue and elevated expenditure without establishing additional causes beyond those disclosed.