Shanthi Gears Q1: PAT down 57% to ₹9.85 Cr, revenue off 14% as margins compress sharply

Shanthi Gears opened FY27 with a sharp, fully operating downturn: standalone revenue fell 14.4% YoY to ₹115.49 Cr (from ₹134.89 Cr) and 14.5% sequentially (from ₹135.10 Cr), while PAT more than halved to ₹9.85 Cr — down 56.6% YoY (₹22.69 Cr) and 39.5% QoQ (₹16.27 Cr). Unlike the March quarter, there were no exceptional items this period, and the year-ago base was also clean, so the profit collapse is entirely underlying, not an accounting artefact. The damage is concentrated in margins. Net profit margin compressed to 8.5% from 16.4% a year ago (and 11.5% last quarter), PBT margin fell to 12.3% from 22.7%, and operating margin dropped to roughly 13% versus 22.6% YoY. With materials and employee costs largely sticky against a lower topline, operating deleverage did most of the work — total expenses (₹105.48 Cr) fell far less than revenue, so the entire volume decline flowed to the bottom line. The print was a clear miss: Univest/Uniresearch had modelled revenue ~₹131 Cr (−2.9% YoY) and PAT ~₹24 Cr (+4.5% YoY) — the actual ₹115.5 Cr / ₹9.85 Cr undershot both by a wide margin. Management offers no formal guidance; its own framing centred on the four priorities of revenue, profitability, ROIC and free cash flow, reporting 17% ROIC and ₹16.2 Cr FCF for the quarter, and an unexecuted order book of ₹378 Cr as on 30 June 2026 — the one forward anchor for a topline recovery. The result also lands amid management churn: an interim CFO is in place after the incoming CFO's joining was delayed, and the Head — Strategic Sourcing has resigned effective 15 September 2026.