Over the past 3 years the company has increased its sales from Rs 63.80 crores to Rs 184.26 crores registering a compounded annual growth of 42.40% .During this period the net profit grew from Rs 6.51 crores to Rs 28.06 crores registering an annual compounded growth of 62%.

This company appears to have been very well managed and the high RoE at 34.26 up from 14.16 in 2003 indicates the efficient use of capital.

The company’s products are used in all the major sectors such as Steel, Sugar, Cement. Agriculture, Pharmaceutical, Paper, Fertilizers etc. General corporate buoyancy should lead to the growth momentum being maintained during the next couple of years in almost all these sectors. India Inc is expected to spend Rs 800,000 crores over the next 3 years and all induistries associated with capex should show supernormal growth for the said period.

In India Shanti Gears remains the No. 1 Gear company as no other Gear Manufacturer is engaged in the Manufacture of such diversified high quality control facilities.

To counter a sudden decline in domestic demand Shanti Gears has tried to go global and focus on exports. This would lead to a spreading of risks. In this connection the company is trying to break into the German market. Germany is the heart of quality engineering and the   acceptance of products made by Shanti Gears is in itself an achievement. An office has been set up at Düsseldorf to oversee this activity.

Recommendations: Investors should buy into this stock as it seems attractively valuedwith potential to yield fairly high returns. This company should deliver between 30%- 40% annualized growth for the next 2 to 3 years and while it does that investors could make money because of the initiatives that are being rolled out which when completed should supplement the growth rate even further.