Shanthi Gears Surges 40% in Two Days on Promoter Stake Increase
Shares of Shanthi Gears, a Murugappa Group company, have surged over 40% in just two trading sessions, driven by promoter Tube Investments of India increasing its stake in the company through a block deal. The stock rallied over 15% on Monday, August 24, extending gains from the previous session, and is now trading around 10% below its record high, according to CNBC TV18.
Promoter Action
The sharp rally was triggered by Tube Investments acquiring an additional 2.7% stake in Shanthi Gears through block deals. Business Standard reports that Tube Investments acquired 2.06 million equity shares, representing 2.69% of the paid-up share capital, on August 21, 2026. The Economic Times adds that the transaction was not classified as a related-party transaction and required no government or regulatory approvals, which appears to have encouraged investors. Post the transaction, Tube Investments' holding increased to 73.16% from 70.46%, as reported by both Business Standard and The Economic Times.
CNBC TV18 provides historical context, noting that Tube Investments acquired a controlling stake in Shanthi Gears in 2012, with its holding at 70.12% then, increasing to around 70.5% in 2019 and now to 73.2%.
Business and Financial Performance
Shanthi Gears designs and manufactures gears, gearboxes, geared motors, and gear assemblies, and also provides refurbishment and repair services, as detailed by Business Standard and The Economic Times. For FY26, the company reported a turnover of Rs 518.72 crore, down from Rs 604.62 crore in FY25 and Rs 536.05 crore in FY24, according to reports.
CNBC TV18 offers a more detailed financial picture, noting that the stock rally comes despite a weak operating performance in the June quarter. For Q1FY27, revenue declined 15% year-on-year to Rs 115 crore, while EBITDA fell 52% to Rs 15 crore, with margins contracting to 13% from 23%. The unexecuted order book stood at Rs 378 crore as of June 30, 2026. For FY26, revenue declined 14% to Rs 519 crore, with EBITDA falling 14% to Rs 124 crore, though margins remained stable at around 23.9%. Free cash flow also declined to Rs 30 crore from Rs 75 crore, though the company remains debt-free. Order inflows gained momentum in H2FY26, with record order bookings in Q4FY26.
Broader Market Moves
In the broader market context, Ratnamani Metals & Tubes also rallied 18% to Rs 2,776.45 on the BSE after its subsidiary received export orders worth $286 million, while Quadrant Future Tek rose 14% to Rs 464.85 on a 10-fold jump in trading volume, according to Business Standard.