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Last Updated on: 13 June, 2024|Author: Getaka | Social: X Twitter Profile

Fundamental Analysis of Shanthi Gears Ltd

Basic Stock Data

Last Updated: June 12, 2024, 10:24 pm

Market Cap 4,192 Cr.
Current Price 546
High / Low645/400
Stock P/E51.0
Book Value 45.0
Dividend Yield0.93 %
ROCE33.9 %
ROE25.4 %
Face Value 1.00
PEG Ratio1.91

Competitors of Shanthi Gears Ltd

Stock NameMarket CapCurrent PriceHigh / LowStock P/EBook ValueDividend YieldROCEROEFace Value
The Hi-Tech Gears Ltd 1,934 Cr. 1,0301,280/32851.9 2480.23 %12.5 %9.08 % 10.0
JTEKT India Ltd 4,482 Cr. 176188/12657.1 30.00.29 %15.9 %12.4 % 1.00
Industry Average3,208.00 Cr603.0054.50139.000.26%14.20%10.74%5.50

Quarterly Result

MonthMar 2021Jun 2021Sep 2021Dec 2021Mar 2022Jun 2022Sep 2022Dec 2022Mar 2023Jun 2023Sep 2023Dec 2023Mar 2024
Sales7267729510499109115123121135126154
Expenses60556077858187929798107102127
Operating Profit12121217191822232723292327
OPM %16%18%16%18%18%18%20%20%22%19%21%19%17%
Other Income32222233344410
Interest-0-0-0-0-0-0-0-0-0-0-0-0-0
Depreciation2333333333334
Profit before tax12121117191823232724302432
Tax %23%25%30%20%35%24%26%25%27%25%29%27%20%
Net Profit99814121317181918211726
EPS in Rs1.231.121.031.791.591.752.162.292.542.362.742.273.35

Last Updated: June 10, 2024, 5:51 am

Quarterly Chart

Profit & Loss - Annual Report

Last Updated: May 27, 2024, 6:03 am

MonthMar 2013Mar 2014Mar 2015Mar 2016Mar 2017Mar 2018Mar 2019Mar 2020Mar 2021Mar 2022Mar 2023Mar 2024
Sales146155155164183214242242216337446536
Expenses102113136134147177200208189277355434
Operating Profit4442183136374135276090102
OPM %30%27%12%19%20%17%17%14%12%18%20%19%
Other Income8101291112127891121
Interest100000000000
Depreciation2926171718161189101113
Profit before tax2226132328334233265990110
Tax %30%29%29%23%21%14%21%23%23%28%26%25%
Net Profit15189182329332520426782
EPS in Rs1.892.251.142.172.753.504.083.282.635.548.7410.72
Dividend Payout %32%44%44%23%27%29%147%61%57%45%57%47%

Profit & Loss Yearly Chart

YoY Net Profit Growth

Year2013-20142014-20152015-20162016-20172017-20182018-20192019-20202020-20212021-20222022-20232023-2024
YoY Net Profit Growth (%)20.00%-50.00%100.00%27.78%26.09%13.79%-24.24%-20.00%110.00%59.52%22.39%
Change in YoY Net Profit Growth (%)0.00%-70.00%150.00%-72.22%-1.69%-12.29%-38.04%4.24%130.00%-50.48%-37.14%

Growth

Compounded Sales Growth
10 Years:12%
5 Years:16%
3 Years:23%
TTM:19%
Compounded Profit Growth
10 Years:16%
5 Years:19%
3 Years:39%
TTM:27%
Stock Price CAGR
10 Years:23%
5 Years:35%
3 Years:60%
1 Year:56%
Return on Equity
10 Years:10%
5 Years:14%
3 Years:17%
Last Year:24%

Last Updated: May 1, 2024, 8:32 am

Balance Sheet

MonthMar 2012Mar 2013Mar 2014Mar 2015Mar 2016Mar 2017Mar 2018Mar 2019Mar 2020Mar 2021Mar 2022Mar 2023Sep 2023
Equity Capital8888888888888
Reserves240249258263276298310294221229252295319
Borrowings4000000000000
Other Liabilities373131363441425154888176103
Total Liabilities289288298306318348360353283325341378430
Fixed Assets1381169582666557596074667069
CWIP6444010060321
Investments038501663701141247947505777
Other Assets145131149205189212189170138205221248283
Total Assets289288298306318348360353283325341378430

Reserves and Borrowings Chart

Shanthi Gears Ltd Cash Flow

MonthMar 2012Mar 2013Mar 2014Mar 2015Mar 2016Mar 2017Mar 2018Mar 2019Mar 2020Mar 2021Mar 2022Mar 2023
Cash from Operating Activity 284929-64614422756313563
Cash from Investing Activity -4-67-1210-43-13-264024-18-16-26
Cash from Financing Activity -16-14-15-5-50-17-49-98-12-19-23
Net Cash Flow8-322-1-21-118-181-114

Free Cash Flow

MonthMar 2013Mar 2014Mar 2015Mar 2016Mar 2017Mar 2018Mar 2019Mar 2020Mar 2021Mar 2022Mar 2023Mar 2024
Free Cash Flow44.0042.0018.0031.0036.0037.0041.0035.0027.0060.0090.00102.00

Free Cash Flow = Income Generated from Operational Activities - Borrowings - Capital Work in Progress (CWIP)

Consistent positive free cash flow is crucial for businesses as it indicates their ability to generate cash from their core operations. It provides financial flexibility, allowing companies to invest in growth opportunities, pay dividends to shareholders, reduce debt, and weather economic downturns more effectively.

Free Cash Flow Chart

Financial Efficiency Indicators

MonthMar 2012Mar 2013Mar 2014Mar 2015Mar 2016Mar 2017Mar 2018Mar 2019Mar 2020Mar 2021Mar 2022Mar 2023
Debtor Days516364878692958558807856
Inventory Days400305335371403397238237192275141113
Days Payable112413213412913296105951939774
Cash Conversion Cycle44034426732535935723721815416312295
Working Capital Days120131135180308317230135104876956
ROCE %17%8%10%5%8%10%10%13%12%11%24%32%

Financial Efficiency Indicators Chart

Shanthi Gears Ltd Share Holding Pattern

MonthMar 2021Jun 2021Sep 2021Dec 2021Mar 2022Jun 2022Sep 2022Dec 2022Mar 2023Jun 2023Sep 2023Dec 2023
Promoters70.47%70.47%70.47%70.47%70.47%70.47%70.47%70.47%70.47%70.47%70.47%70.47%
FIIs4.48%4.73%4.66%3.07%2.90%2.96%2.97%3.64%3.70%3.73%3.61%3.44%
DIIs1.17%1.02%0.74%0.73%0.89%0.98%0.99%0.88%0.84%0.68%0.62%0.58%
Public23.87%23.78%24.13%25.73%25.74%25.59%25.54%25.01%24.98%25.11%25.30%25.51%
No. of Shareholders16,63416,98719,91322,88920,50824,34423,88124,54724,01626,58329,39330,329

Shareholding Pattern Chart

No. of Shareholders

Mutual Fund Holdings

Fund NameNo of SharesAUM (%)Amount Invested (Cr)Previous Number of SharesPrevious DatePercentage Change
Bank of India Small Cap Fund209,0001.4812.5525,0682024-06-10733.73%
Motilal Oswal Nifty Microcap 250 Index Fund25,0680.241.5125,0682024-06-100%

ROCE Trend

EPS Trend

Key Financial Ratios

MonthMar 24Mar 23Mar 22Mar 21Mar 20
FaceValue1.001.001.001.001.00
Basic EPS (Rs.)10.728.745.542.633.28
Diluted EPS (Rs.)10.728.745.542.633.28
Cash EPS (Rs.)12.4510.166.893.784.38
Book Value[Excl.RevalReserv]/Share (Rs.)45.0239.4233.8930.9229.81
Book Value[Incl.RevalReserv]/Share (Rs.)45.0239.4233.8930.9229.81
Dividend / Share (Rs.)5.005.002.501.502.00
Revenue From Operations / Share (Rs.)69.8958.1043.9528.1031.59
PBDIT / Share (Rs.)16.0213.189.014.555.36
PBIT / Share (Rs.)14.2911.767.663.404.26
PBT / Share (Rs.)14.2911.767.663.404.26
Net Profit / Share (Rs.)10.728.745.542.633.28
PBDIT Margin (%)22.9122.6720.5016.2016.95
PBIT Margin (%)20.4520.2317.4212.0913.49
PBT Margin (%)20.4520.2317.4212.0913.49
Net Profit Margin (%)15.3415.0412.599.3510.39
Return on Networth / Equity (%)23.8122.1716.338.5011.01
Return on Capital Employeed (%)31.7029.7822.5110.8814.20
Return On Assets (%)18.5717.7412.466.198.90
Asset Turnover Ratio (%)1.311.241.010.700.76
Current Ratio (X)3.383.602.992.483.32
Quick Ratio (X)2.502.722.191.572.16
Inventory Turnover Ratio (X)3.453.282.281.551.71
Dividend Payout Ratio (NP) (%)0.0034.3145.1657.0673.48
Dividend Payout Ratio (CP) (%)0.0029.5236.2939.6455.12
Earning Retention Ratio (%)0.0065.6954.8442.9426.52
Cash Earning Retention Ratio (%)0.0070.4863.7160.3644.88
Enterprise Value (Cr.)4241.652700.271315.92917.83508.45
EV / Net Operating Revenue (X)7.916.063.904.262.10
EV / EBITDA (X)34.5326.7219.0426.2812.38
MarketCap / Net Operating Revenue (X)7.936.264.104.522.11
Retention Ratios (%)0.0065.6854.8342.9326.51
Price / BV (X)12.319.235.324.112.23
Price / Net Operating Revenue (X)7.936.264.104.522.11
EarningsYield0.010.020.030.020.04

Profitability Ratios (%)

Liquidity Ratios

Liquidity Ratios (%)

Interest Coverage Ratios (%)

Valuation Ratios

Fair Value

Fair Value: 588.35

Calculation basis:

  • Fair value = P/E Ratio * (Return on Equity / 100) * Book Value * (1 + Dividend Yield / 100)
  • P/E Ratio (Price-to-Earnings Ratio): Represents the price of the stock relative to its earnings per share. A higher P/E ratio indicates that investors are willing to pay a higher price for the stock.
  • Return on Equity (ROE): Measures a company's profitability relative to its shareholder equity. It showcases the company's ability to generate profits using the investment made by its shareholders, offering valuable insight into its operational efficiency and financial performance
  • Book Value: Represents the net asset value of the company per share. It is calculated as the total assets minus intangible assets and liabilities, divided by the number of outstanding shares.
  • Dividend Yield: The ratio of the annual dividend per share to the current market price per share. It offers valuable insights into the profitability of an investment through dividends.

This formula allows us to gauge the fair value of the stock by analyzing its fundamental indicators.

Undervalued: 7.76% compared to the current price 546

Intrinsic Value: 745.59

Calculation basis:

  • Fair value = P/E Ratio * (Return on Equity / 100) * Book Value * (1 + Dividend Yield / 100) * (1 + EPS CAGR for Last 5 Years)
  • P/E Ratio (Price-to-Earnings Ratio): Represents the price of the stock relative to its earnings per share. A higher P/E ratio indicates that investors are willing to pay a higher price for the stock.
  • Return on Equity (ROE): Measures a company's profitability relative to its shareholder equity. It showcases the company's ability to generate profits using the investment made by its shareholders, offering valuable insight into its operational efficiency and financial performance.
  • Book Value: Represents the net asset value of the company per share. It is calculated as the total assets minus intangible assets and liabilities, divided by the number of outstanding shares.
  • Dividend Yield: The ratio of the annual dividend per share to the current market price per share. It offers valuable insights into the profitability of an investment through dividends.
  • EPS CAGR (Compound Annual Growth Rate): Represents the geometric mean growth rate of earnings per share over the last 5 years. It provides insight into the historical growth trajectory of the company's earnings.

This formula allows us to gauge the fair value of the stock by analyzing its fundamental indicators along with EPS growth.

Undervalued: 36.56% compared to the current price ₹546

Last 5 Year EPS CAGR: 26.73%

*Investments are subject to market risks

Strength and Weakness

StrengthWeakness
  1. The company has higher reserves (273.58 cr) compared to borrowings (0.00 cr), indicating strong financial stability.
  2. The company has shown consistent growth in sales (253.00 cr) and profit (42.08 cr) over the years.
  1. The stock has a low average ROCE of 13.33%, which may not be favorable.
  2. The stock has a high average Working Capital Days of 156.00, which may not be favorable.
  3. The stock has a high average Cash Conversion Cycle of 256.75, which may not be favorable.

Stock Analysis

  • Considering all of the following key financial indicators, prospective investors are encouraged to conduct thorough research and seek professional guidance before considering any investment in Shanthi Gears Ltd:
    1. Net Profit Margin: 15.34%
      • Net Profit Margin: This metric indicates the percentage of profit a company makes from its total revenue. A higher net profit margin is generally desirable as it reflects better profitability.
    2. ROCE: 31.70% (Industry Average ROCE: 14.2%)
      • ROCE (Return on Capital Employed): ROCE measures a company's profitability and the efficiency with which its capital is employed. A higher ROCE indicates efficient use of capital.
    3. ROE%: 23.81% (Industry Average ROE: 10.74%)
      • ROE (Return on Equity): ROE measures a company's profitability relative to shareholders' equity. A higher ROE indicates efficient use of shareholders' funds.
    4. Interest Coverage Ratio (Post Tax): N/A
      • Interest Coverage Ratio: The interest coverage ratio measures a company's ability to cover its interest payments on outstanding debt. A ratio greater than 2 is generally considered healthy as it indicates the company can meet its interest obligations comfortably.
    5. Quick Ratio: 2.50
      • Quick Ratio: The quick ratio assesses a company's ability to cover its short-term liabilities with its most liquid assets. A ratio higher than 1 suggests the company can meet its short-term obligations without relying heavily on inventory.
    6. Stock P/E: 51.0 (Industry average Stock P/E: 54.5)
      • Stock P/E (Price-to-Earnings) Ratio: The P/E ratio compares a company's current share price to its earnings per share. A lower P/E ratio relative to industry peers or historical values may indicate that the stock is undervalued.
    7. ✗ Total Debt / Equity: N/A
      • Total Debt / Equity: This ratio measures a company's financial leverage by comparing its total debt to its total equity. A lower ratio indicates lower financial risk and greater financial stability.
    The current analysis is available for review. It's important to conduct thorough research and consider consulting with financial professionals before making any investment decisions.
    Stock Rating:

About the Company

Shanthi Gears Ltd. is a Public Limited Listed company incorporated on 01/07/1972 and has its registered office in the State of Tamil Nadu, India. Company’s Corporate Identification Number(CIN) is L29130TZ1972PLC000649 and registration number is 000649. Currently Company is involved in the business activities of Manufacture of bearings, gears, gearing and driving elements. Company’s Total Operating Revenue is Rs. 337.07 Cr. and Equity Capital is Rs. 7.67 Cr. for the Year ended 31/03/2022.
INDUSTRYADDRESSCONTACT
Auto Ancl - Gears & Drive304-A, Trichy Road, Singanallur, Coimbatore Tamil Nadu 641005cs@shanthigears.murugappa.com
http://www.shanthigears.com
Management
NamePosition Held
Mr. L RamkumarIndependent Director
Mr. J BalamuruganIndependent Director
Ms. Soundara KumarIndependent Director
Dr. S K SudararamanIndependent Director
Mr. Mukesh AhujaNon Executive Director
Mr. Krishna SamarajIndependent Director
Mr. M A M ArunachalamChairman
Mr. M KarunakaranWhole Time Director
Mr. Arun VenkatachalamNon Executive Director

FAQ

What is the latest fair value of Shanthi Gears Ltd?

The latest fair value of Shanthi Gears Ltd is ₹588.35.

What is the Market Cap of Shanthi Gears Ltd?

The Market Cap of Shanthi Gears Ltd is 4,192 Cr..

What is the current Stock Price of Shanthi Gears Ltd as on 13 June 2024?

The current stock price of Shanthi Gears Ltd as on 13 June 2024 is ₹546.

What is the High / Low of Shanthi Gears Ltd stocks in FY 2024?

In FY 2024, the High / Low of Shanthi Gears Ltd stocks is 645/400.

What is the Stock P/E of Shanthi Gears Ltd?

The Stock P/E of Shanthi Gears Ltd is 51.0.

What is the Book Value of Shanthi Gears Ltd?

The Book Value of Shanthi Gears Ltd is 45.0.

What is the Dividend Yield of Shanthi Gears Ltd?

The Dividend Yield of Shanthi Gears Ltd is 0.93 %.

What is the ROCE of Shanthi Gears Ltd?

The ROCE of Shanthi Gears Ltd is 33.9 %.

What is the ROE of Shanthi Gears Ltd?

The ROE of Shanthi Gears Ltd is 25.4 %.

What is the Face Value of Shanthi Gears Ltd?

The Face Value of Shanthi Gears Ltd is 1.00.

About the Author

Author Avatar
Getaka

Getaka, CFA, a financial analyst with 15 years of experience in the industry. Getaka holds an MBA degree and the Chartered Financial Analyst designation, demonstrating his profound understanding of financial analysis and investment management. Throughout his career, he has conducted numerous financial analyses and due diligence processes for companies in the industry, and has a strong track record of identifying key trends and opportunities. He leverages his expertise to deliver a thorough financial analysis of a company, encompassing its financial performance, key ratios, future prospects, and risks. Getaka is committed to providing accurate, reliable, and trustworthy information to help readers make informed decisions about their finances and investments.

Disclaimer: This article is for informational purposes only and should not be construed as financial advice. The author is not a SEBI registered financial advisor and does not have any vested interest in Shanthi Gears Ltd. Investors are advised to conduct their own due diligence and consult with a financial professional before making any investment decisions. The information provided in this article is based on publicly available data and the author's analysis, but it may not be comprehensive or up-to-date. The author and getaka.co.in are not responsible for any errors or omissions in the content. This article is not intended to promote any particular investment strategy or recommendation, and readers should consult with their own financial advisors before making any investment decisions. Data Source: NSE