Tube Investments of India Ltd Tube Investments of India Ltd has acquired a 2.69% stake in its listed subsidiary, Shanthi Gears Limited, through a block deal executed on August 21, 2026.

The acquisition involves 20,64,713 equity shares at a total consideration of approximately ₹77.49 crore. This transaction increases Tube Investments' shareholding in Shanthi Gears from 70.46% to 73.16%.

Transaction Details

The deal was approved by the Board of Directors of Tube Investments during a meeting held on August 21, 2026. The company disclosed the move under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, citing it as part of its long-term investment plans.

Key parameters of the acquisition include:

• Target Entity: Shanthi Gears Limited (SGL)
• Shares Acquired: 20,64,713 equity shares (face value Re. 1 each)
• Consideration: All cash
• Execution Mode: Block deal via stock exchange
• Related Party Status: Not classified as a related party transaction

About Shanthi Gears Limited

Shanthi Gears Limited, incorporated on July 1, 1972, operates in the gears and gearboxes manufacturing sector. The company designs and manufactures gears, gearboxes, geared motors, and gear assemblies, while also offering refurbishment and repair services for gearboxes.

Financial Overview

Shanthi Gears reported a turnover of ₹518.72 crore as on March 31, 2026. Its paid-up equity share capital stands at ₹7.67 crore.

No governmental or regulatory approvals were required for this acquisition.

Tube Investments reported mixed financial results for Q1FY27, with double-digit revenue growth across key business areas failing to translate into proportional bottom-line expansion due to input cost pressures. The company's consolidated revenue rose 17% year-on-year to ₹6,215.3 crore, up from ₹5,309.1 crore in the corresponding period last year. Despite this robust topline performance, profit after tax (PAT) from continuing operations contracted 3% to ₹294.0 crore, down from ₹303.2 crore previously. The Board of Directors approved the unaudited standalone and consolidated financial results in a meeting held on August 14, 2026, reviewed by statutory auditors S.R. Batliboi & Associates LLP.

Consolidated financial performance

The consolidated results reflect margin pressure even as revenue expanded by nearly ₹900 crore. The following table summarises the key consolidated metrics:

*Profit before share of associate/JV, exceptional items, and tax.

Standalone performance

On a standalone basis, Tube Investments logged revenue of ₹2,366.2 crore, an 18% increase over ₹2,006.6 crore in Q1FY26. Profit before tax (PBT) remained relatively flat at ₹212.7 crore, compared to ₹222.1 crore in the prior year. Net profit after tax declined 6% to ₹158.6 crore, down from ₹168.1 crore. Operating expenses expanded faster than revenue during the period, with total expenses rising to ₹2,170.9 crore from ₹1,808.0 crore, driven by higher cost of materials consumed (₹1,431.9 crore vs ₹1,170.4 crore), other operating expenses (₹423.5 crore vs ₹338.6 crore), and employee benefits expense (₹193.4 crore vs ₹167.9 crore).

Segment-wise breakdown

Double-digit revenue growth was recorded across key segments during the quarter. The Engineering segment remained the largest revenue contributor on a standalone basis, generating ₹1,566.3 crore, up 21% year-on-year, with segment result stable at ₹153.0 crore. Volume growth in this segment stood at 17%, with exports contributing significantly to the rise. The Mobility segment saw revenue rise 26% to ₹250.4 crore, with segment profit improving to ₹9.1 crore from ₹6.9 crore. The Metal Formed Products segment experienced margin pressure; while revenue grew 12% to ₹407.8 crore, segment profit fell 25% to ₹27.6 crore from ₹36.5 crore.

Key developments

During the quarter, the company acquired a 76.24% stake in Orange Koi Private Limited for ₹35 crore, making it a subsidiary effective April 6, 2026. Orange Koi manufactures precision parts for the medical and defence industries using metal injection molding and additive manufacturing technologies. Additionally, Tube Investments invested ₹25 crore towards Series D Compulsorily Convertible Preference Shares in its subsidiary, 3xper Innoventure Limited.

The consolidated results include significant contributions from subsidiaries CG Power and Industrial Solutions Limited and Shanthi Gears Limited. CG Power reported consolidated revenue of ₹3,281 crore, up 14% YoY, with PBT rising to ₹423 crore from ₹364 crore. Shanthi Gears saw revenue decline 15% to ₹115 crore, with PBT falling to ₹14 crore from ₹31 crore.

Management commentary and outlook

Management attributed the standalone margin compression primarily to steel price increases in Q4 and Q1, noting that price hikes are typically passed on to customers with a lag of two to three quarters. The company expressed confidence in fully recovering these costs, expecting margin neutralisation in subsequent quarters. Non-steel inflation factors, such as fuel and freight costs linked to geopolitical tensions, are also under discussion with OEMs for recovery.

In the e-mobility space, TI Clean Mobility recorded a historic turnover of close to ₹240 crore, driven by volume surges across all four business units. Three-wheeler volumes jumped 64% quarter-on-quarter to 1,924 units, while small commercial vehicles hit record quarterly volumes of 347 units. Heavy commercial vehicle sales included 86 big trucks and 22 tractors. Management indicated that the segment has likely passed its peak quarterly losses, with one business unit expected to breakeven in FY27 and two others in FY28. Exports accounted for approximately 14% of total TI revenue, with strong double-digit growth observed in the quarter.

Capital expenditure plans for FY27 stand at ₹350 crore for TI India and ₹100 crore for Shanthi Gears, excluding CG Power. The group anticipates infusing another ₹250 crore into subsidiaries in Q3, part of a broader ₹750 crore allocation over time. The CDMO business, 3xper Innoventure, is on track with commissioning its 200 KL reactor capacity, with clean room validation expected within 30 to 40 days and regulatory inspections anticipated in the next financial year.

What the Numbers Show

The divergence between revenue growth and profit contraction highlights margin erosion across the group. While consolidated revenue expanded by nearly ₹900 crore, operating profit (PBT before exceptional items) grew only ₹12 crore, indicating that input cost inflation and higher operating expenses absorbed most of the topline gains. The decline in standalone net profit despite flat PBT reflects a significant drop in other income to ₹17.4 crore from ₹159.3 crore in the prior year quarter, which included one-time gains, even as tax expense remained broadly stable at ₹54.1 crore versus ₹54.0 crore. This suggests the core operational profitability was pressured by cost inflation, while the bottom-line miss was exacerbated by the absence of prior-period exceptional items.