| Name of Company | Shanthi Gears Ltd. |
| BSE Code | 522034 |
| NSE Code | SHANTIGE |
| ICICI Code | |
| Established | 1969 (as Shanthi Engineering and trading company) |
| My Take | Like |
| Headquarters | Coimbatore |
| Promoters | P Subramanian |
| Story | The company claims to be the leading loose gear manufacturer in India. Manufactures gears and gear boxes in Coimbatore plant. |
| Sector | Engineering |
| Sub-sector | Gears and gear boxes |
| Website | http://www.shanthigears.com |
| Positives | 44% promoter shareholding, no pledges. HDFC MF, SBI MF, NIC hold more than 18% of the shares. Regular dividend payer – yield more than 2.4%. Good NPMs from 13 to 18%. Consistent profits |
| Negatives | Revenues and NPs have dropped in FY10 to 123 Cr and 16 Cr from 253 Cr and 44 Cr in FY09. FY11 also has been a similar story with less revenue. |
| Peers | |
| News | |
| Price @ blogged | 33.1 (04-May-11) |
| Cost of company | 270.43 Cr market cap for a 16.19 Cr NP in FY ending Mar ' 10 makes it 16.7 times. This is for a company with 25.63 Cr debt and 202.68 Cr reserves |
| Group | Cyclical |
| Growth |
May 9, 2011
Shanthi Gears Ltd - 522034
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The company has been trying to reduce its debt from 120 Cr to 25 Cr in 5 years from Fy06 to Fy10. Even in this slowdown, margins are still very good. In 2006, we might have thought that this company was a big grower with sales growing from 64 Cr to 184 Cr in 3 years (42% annual). NP grew 6.5 Cr to 28% (62% annual). But in FY10 and FY11, the revenues are less than that of FY06 (FY06 revenues are 184 Cr, FY10 revenues are 129 Cr, FY11 also seems to be around 130 Cr).
ReplyDeleteThis can happen for cyclicals during downturns. But I believe in a company which can maintian its margins and lower its debt can go much better heights in the next upturn.