Shanthi Gears Q3 FY26: Profit down 38% as sales slide

What changed in the December 2025 quarter

Shanthi Gears Ltd, which designs, manufactures, supplies and services gears and gear boxes, reported a weaker set of standalone numbers for the quarter ended December 2025 (Q3 FY26). The company’s net profit declined 38.39% year-on-year to ₹16.19 crore, while sales fell 25.83% to ₹116.82 crore. The performance marked another quarter of pressure on demand and profitability, with commentary in the data pointing to operational challenges amid a broader slowdown in the industrial sector. The numbers also extended what was described as the third consecutive quarter of contraction.

Headline results: sales and net profit

For Q3 FY26, Shanthi Gears reported sales of ₹116.82 crore compared with ₹157.51 crore in the year-ago quarter, a decline of about 26%. Net profit came in at ₹16.19 crore versus ₹26.28 crore in Q3 FY25, translating to a fall of about 38%. A separate summary of the results also described net profit at ₹16.20 crore compared with ₹26.30 crore, with a year-on-year decline of 38.4%. Across those summaries, the net profit drop was highlighted as ₹10.10 crore year-on-year.

Margin pressure shows up in operating metrics

Operating profit (PBDIT excluding other income) was reported at ₹22.99 crore in Q3 FY26, down from ₹34.95 crore a year earlier. Operating margin for the quarter was stated at 19.68%, lower than 22.19% in the year-ago quarter, indicating contraction of about 245-251 basis points depending on the reference. PAT margin was reported at 13.86%, down 282 basis points year-on-year. Gross profit margin was also noted to have reduced to 21.83% from 24.66% year-on-year, suggesting either pricing pressure or a change in product mix.

Profit before tax and the role of other income

Profit before tax (PBT) for the December 2025 quarter was shown at ₹23.15 crore versus ₹35.43 crore in the comparable quarter, reflecting a decline of about 35% in that table. Other income was cited at ₹4.07 crore, described as a cushion but lower than ₹5.94 crore in Q2 FY26. Tax expense was reported at ₹5.40 crore, with an effective tax rate of 25.01%. The combination of lower sales and weaker margins was reflected in the compressed profitability metrics.

A three-quarter slide in revenue, including sequential decline

The December 2025 quarter was described as the third consecutive quarter of revenue contraction. Net sales of ₹116.82 crore were stated to have declined 11.44% from Q2 FY26’s ₹131.91 crore. On a year-on-year basis, the 25.83% fall was characterised as the steepest revenue decline in recent quarters within the information provided. The sequential deterioration was also linked to top-line pressure and operational challenges.

Net sales snapshots across recent quarters

Standalone net sales in June 2025 were reported at ₹134.89 crore, down 2.83% year-on-year. Standalone net sales in September 2025 were reported at ₹131.91 crore, down 14.94% year-on-year. A separate data point also listed standalone March 2025 net sales at ₹153.21 crore, down 0.28% year-on-year. Together, these points show progressively weaker year-on-year comparisons into the September and December 2025 quarters.

Stock reaction: October sell-off after Q2 results

Shanthi Gears’ share price also saw a sharp reaction earlier in the year after Q2 FY26 results. On October 24, the stock fell more than 6% to a three-month low of ₹493.65 after the company reported a Q2 net profit of ₹21.5 crore, down 16%. The October move matters because it indicates how quickly the market has been repricing the stock as profit growth slowed. In the dataset, a screen-based reference also cited a current price of ₹474.35 alongside a fair value estimate.

FY25 backdrop: profit growth for the full year

For the quarter ended March 2025 (Q4 FY25), Shanthi Gears reported profit after tax of ₹22.46 crore, compared with ₹25.68 crore in the corresponding quarter of the previous financial year. Total income in that January-March 2025 quarter was ₹157.22 crore versus ₹163.16 crore a year earlier, while revenue for Q4 was stated at ₹153.02 crore, nearly flat compared with ₹153.6 crore. For the full year ended March 31, 2025, profit after tax rose to ₹96.03 crore from ₹82.25 crore, while total income increased to ₹619.28 crore from ₹557.11 crore.

Key figures at a glance

What investors are watching next

The December 2025 quarter data highlighted three pressure points: falling sales, margin compression, and reduced earnings visibility in an industrial slowdown. Nine-month FY26 net sales were reported at ₹383.62 crore, suggesting the weakness is not limited to a single quarter. Institutional holding was also described as having collapsed to 3.39% in the dataset. Separately, a fair value estimate of ₹340-360 was cited, implying 28-32% downside from a referenced price of ₹474.35.

Conclusion

Shanthi Gears’ Q3 FY26 numbers showed a sharp year-on-year decline, with sales down to ₹116.82 crore and net profit down to ₹16.19 crore, alongside weaker operating margins. The pressure follows an already soft Q2, when the stock dropped over 6% after profit fell 16% to ₹21.5 crore. With three consecutive quarters of revenue contraction highlighted in the available data, the next set of quarterly updates will be important for tracking whether demand and margins stabilise.