Shanthi Gears (SHANTIGEAR)

FairStock Score: 4/100 — RISKY

Score breakdown: P/E: 0/3 · ROCE: 2/2 · Growth: 0/2 · Dividend: 0/1

Key Financials

AI Analysis

AI-generated, general educational analysis — not personal investment advice.

At ₹477.50, Shanthi Gears is priced at 41.1 times earnings and 9.7 times book value. I have to ask: what is the business actually earning? Sales fell 25.83% and profits fell 34.02%. The latest quarter shows ₹117 crore of sales and ₹16 crore of net profit. If I annualise that quarter, I get roughly ₹64 crore of profit—so the market is paying more than 50 times current earnings power, not 41 times. That is not a Graham-style margin of safety. Yes, the company is not a bad business. ROE of 21.98% and ROCE of 34.87% are well above the industrial average, and promoter holding at 70.47% means the operators have real skin in the game. But gears are a cyclical industrial product; when the demand cycle turns down, today’s high returns can fade fast. The F-score of 3/9 and the FairStock score of 4/100 warn that this is not a financially strong situation. Also, book value is just ₹49.16; paying ₹477.50 means placing enormous faith in future growth, not in assets I can count. I prefer durable earnings and honest valuations. Here I see shrinking sales, shrinking profits, and a share price that has already fallen from ₹598.90 but still looks rich. A great industrial franchise must be bought at a price that protects me; this one does not. I would wait on the sidelines until the cycle turns or the price falls to a level where the downside is limited.

The full AI analysis, bull and bear case and key monitorables are in FairStock Pro.

Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer