The market price of SGL has increased by 47% over the last five weeks, compared to a 1% fall in the benchmark index. The stock soared 86% during the last six months, while the Sensex remained static. Industrial gearing solutions provider SGL designs and produces gears, gearboxes, geared motors, and gear assemblies. It is a subsidiary of Tube Investments of India and a multibillion-dollar member of the Murugappa Group.
According to Shanthi Gears, as of last month, there were no developments that might affect the price or volume behavior of the company’s securities that needed to be disclosed to stock exchanges.
Shanthi Gears reported 56% year-over-year (YoY) sales growth at Rs337 crore for the fiscal year 2021—2022 (FY22), while net profit increased by 11% to Rs42.5 crore. Despite the effects of commodity inflation, the company’s operating margins for FY22 were similarly strong at 17.9% percent because of operating leverage and cost-cutting measures.
The firm reported a 48% YoY increase in sales for the April—June quarter (Q1FY23) of Rs99 crore and a net profit of Rs13.44 crore as compared to Rs8.58 crore in the same quarter last year.
As of June 30, 2022, the firm has a pending order backlog of Rs274 crore, up from Rs235 crore the year before. The firm received orders of Rs105 crore in Q1FY23, up 25% from the prior quarter. For the upcoming quarters, revenue visibility is provided by the strong order book.
“While SGL’s margins are susceptible to fluctuations in the cost of raw materials and challenges from the competition, it would benefit from improved cost absorption as revenues grow in the future. With no significant medium-term capital expenditure plans backed by debt, “ICRA, a rating agency, stated in a report. It anticipates that the firm will continue to have solid liquidity and debt coverage measures.
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