Studds Accessories Limited

Studds Accessories Limited reported a consolidated revenue of INR154.4 crores for Q2 FY26, marking a 6.5% year-on-year growth. EBITDA for the quarter stood at INR29.9 crores, increasing by 12% YoY, with the EBITDA margin expanding by 95 basis points to 19.3%. PAT for Q2 FY26 was INR20.6 crores, a 17.9% YoY growth. For the first half of FY26, consolidated revenue reached INR303.7 crores (6.4% YoY growth), EBITDA was INR60.2 crores (17.9% YoY growth), and PAT was INR40.9 crores (22.9% YoY growth), with H1 EBITDA margin at 19.8%.

The company, established in 1975, has evolved into one of the world's largest helmet manufacturers by volume, offering over 240 helmet styles and designs under its Studds and premium SMK brands. Studds helmets are priced between INR875-4,000, while SMK helmets range from INR3,000-12,800, targeting mass to premium segments. The product portfolio also includes riding gear, luggage, motorcycle apparel, eyewear, and protective accessories. The company refreshes its portfolio annually, launching 7-8 new models and multiple graphic variants.

Studds emphasizes its strong in-house manufacturing capabilities and vertical integration, including EPS manufacturing, mold making, and automated painting lines. The company operates four functional manufacturing facilities and has a fifth facility under construction, expected to commence production in Q1 FY27. This new facility, with an estimated capex of INR150 crores across two phases, is projected to generate INR270-280 crores in annual revenues.

India's helmet penetration remains low at 0.6 helmets per two-wheeler compared to a global average of 1.52, indicating significant growth headroom. The company's strategic direction is anchored around four pillars: deepening global presence, strengthening the premium product portfolio (SMK and premium Studds), growing niche motorcycle accessories, and driving digital transformation. Studds aims for a revenue aspiration of over INR1,000 crores by FY30.

Studds' distribution network primarily consists of helmet distributors (57% of sales) who supply to retail helmet shops, distinct from motorcycle dealerships. OEM sales account for about 15% of sales, where Studds supplies to two-wheeler manufacturers. The blended average selling price (ASP) for Studds is around INR800, with SMK's ASP at INR2,340 and Studds' brand ASP at INR700. Management clarified that they target the entry-to-mid market globally, which accounts for 85% of the total market volume, rather than the super-premium segment.

The Q2 FY26 EBITDA margin improved by 95 bps YoY to 19.3%, driven by product mix and a slight reduction in raw material prices. Management noted that significant margin dips in FY22-23 were due to COVID-19 shutdowns, high raw material costs (ABS price doubled), and European standard changes requiring product revamp. Currently, raw material prices, particularly for plastics like styrene, are on a downward trend due to geopolitical situations and supply, which is expected to further support margins.

H1 FY26 export sales grew by 120% YoY, but Q2 export growth declined. This Q2 decline was attributed to a substantial number of export orders executed at the quarter-end that could not be recognized as revenue, causing a slight margin dip. Management expects an improvement in export sales and margins in the next quarter. The company is also establishing a new warehouse in Spain to improve regional distribution in Europe and enhance brand visibility globally.

The company's online market share is currently lower than its offline share (4-5% of sales). Studds has changed its digital strategy to focus on selling higher-margin products on platforms like Amazon and is increasing its online advertising spend by almost 70% this year. This shift aims to improve revenue and margins from online channels, with monthly tracking in place to monitor progress.