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Studds Accessories Limited — Q3 FY26 earnings call

Call held 2 Feb 2026

Management summary

STUDDS delivered a strong Q3 FY26, marked by significant PAT and EBITDA margin growth, fueled by favorable raw material costs and an optimized product mix. The company is actively investing in brand building and international expansion, with its Spain subsidiary set to launch in Q1 FY27. Despite a minor delay in capacity expansion, management anticipates a stronger Q4 and continued premiumization trends.

Highlights

Consolidated PAT increased by 26.3% YoY to INR 20.7 crores in Q3 FY26, driven by strong operational performance.
EBITDA margins expanded by 160 basis points YoY to 18.8% in Q3 FY26, supported by favorable raw material prices, procurement efficiencies, and an improved product mix.
Gross margins improved significantly to 61.4% in Q3 FY26 from 56.8% in Q3 FY25, reflecting better cost management and product strategy.
Capacity utilization for two-wheeler helmets and boxes stood at a high 96% for the quarter, indicating robust demand and efficient production.
The wholly-owned subsidiary in Spain is progressing as planned, with commercial operations expected to commence in Q1 FY27, enhancing international market reach.

Concerns

The 1.5 million unit capacity expansion for helmets and boxes has been deferred by one quarter, from Q1 FY27 to Q2 FY27, due to temporary pollution-related construction restrictions.

Key financials

3 periods

Headline

Revenue
₹163 Cr
YoY +9.4%
EBITDA
₹30.7 Cr
YoY +20.1%
EBITDA Margin
18.8%
PAT
₹20.7 Cr
YoY +26.3%
PAT Margin
12.7%
Sales Volume
2.24 million units

Q3

Capacity Utilization
96%

9M

Revenue
₹466.7 Cr
YoY +7.5%
EBITDA
₹90.9 Cr
YoY +18.5%
EBITDA Margin
19.5%
PAT
₹61.6 Cr
YoY +23.9%
PAT Margin
13.2%
Sales Volume
6.12 million units
Capacity Utilization
85%
Blended ASP
₹770

What they filed

Q1 FY27: revenue up 14.1%, net profit down 40.0% against the same quarter last year.

₹ Cr · quarterly

Line item	Q2 FY25	Q3 FY25	Q4 FY25	Q1 FY26	Q2 FY26	Q3 FY26	Q4 FY26	Q1 FY27
Revenue	145	149	150	149	154 +6%	163 +9%	168 +12%	170 +14%
Expenses	118	123	122	119	125	132	136	150
EBITDA	27	26	28	30	30 +11%	31 +19%	31 +11%	20 −33%
Margin	18%	17%	19%	20%	19%	19%	19%	12%
Other income	3	2	4	3	3	3	3	3
Interest	0	0	0	0	0	0	0	0
Depreciation	5	5	5	5	5	5	5	5
Profit before tax	24	23	27	28	27 +13%	28 +22%	29 +7%	17 −39%
Tax rate	27%	28%	26%	27%	24%	26%	27%	28%
Net profit	17	16	20	20	21 +24%	21 +31%	21 +5%	12 −40%
EPS	8.89	8.34	5.05	5.15	5.24	5.26	5.36	3.13

How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Capital allocation

high confidence

Capex ₹155 Cr
- New facility for capacity expansion ₹155 Cr
So, the total capex for the new facility which we are building right now is INR155 crores and out of which we have already spent INR 80 crores and another about INR 75 crores is yet to be spent, out of which in the current year, we expect another about INR15 crores and the balance in next 2 years.

Guidance & targets

Revenue

Q4 Revenue Growth Revenue · Q4 FY26 · Medium confidence better number than Q3

Yes, the revenues we expect to exit March with a better number than Q3.

— Sidhartha Khurana

ASP

Blended ASP ASP · FY27 · High confidence beyond INR 800

Yes, so the ASP for the current nine months was INR770 for helmets. And our target is to take it to beyond INR800 next year.

— Sidhartha Khurana

Capacity

Total Installed Capacity Capacity · Current · High confidence 9.5 million units

Previously 9 million units → 9.5 million units

From an operational perspective, our 1.5 million unit capacity expansion for helmets and boxes has been deferred by one quarter due to temporary pollution-related construction restrictions. This will have no material impact on medium-term growth plans. Further to fulfil ongoing demand, we have further optimized our production process and have added additional machinery, which will allow us to produce an additional 5 lakh units on an annual basis with this now total installed capacity stands at 9.5 million units.

— Sidhartha Khurana
Additional Capacity Phase 1 Capacity · Q2 FY27 · High confidence 1.5 million units

The first phase will bring an additional capacity of 1.5 million, which was to start in quarter 1 of 2027. But now we will start in quarter 2 of 2027 because of some construction restrictions applied by the government in Delhi region.

— Sidhartha Khurana
Total Installed Capacity Capacity · Q2 FY27 · High confidence 11 million units

Previously 9.5 million units → 11 million units

But now we will start in quarter 2 of 2027 because of some construction restrictions applied by the government in Delhi region. So, that will bring in 1.5 million additional. We will move from 9.5 to 11 million.

— Sidhartha Khurana
Total Installed Capacity Capacity · FY28 · High confidence 12.5 million units

Previously 11 million units → 12.5 million units

And then in financial year 2028, the second phase of that construction will get into production or will actually get executed. And our capacity will increase from 11 million to 12.5.

— Sidhartha Khurana

Market Share

European Market Share Market Share · next 2-3 years · Medium confidence 6-7% (300,000 helmets)

So, the target is to reach 300,000 helmets in Europe, which is still only about 6% to 7% of the market. So, that is where we want to be next two to three years.

— Sidhartha Khurana

Revenue Mix

SMK Revenue Contribution Revenue Mix · 2-3 years · Medium confidence 25%

From 13% today

I would say that our revenue should touch about revenue, not volume, but revenue should touch close to 25% SMK, which currently is about 13%.

— Sidhartha Khurana
Motorcycle Helmets vs Accessories Revenue Mix · 2-3 years · Medium confidence 70-72% motorcycle helmets, rest accessories

From 85% motorcycle helmets today

But I still feel that motorcycle helmets at the moment, which is about 85% of our revenues, close to 85%, will still be about 70%-72%, and the rest will be accessories.

— Sidhartha Khurana

Market Growth

Indian Helmet Market Growth Market Growth · Future · Medium confidence 12-13%

So, if the motorcycle market grows at about 7% to 8%, we are looking at our market growing about 12% to 13%.

— Sidhartha Khurana

Margin

EBITDA Margins Margin · Going forward · Medium confidence sustained or slightly higher

And I expect the margins to be sustained to these levels or slightly higher than this going forward.

— Sidhartha Khurana

What to watch in Q4 FY26

Spain Subsidiary Commercial Operations

Q1 FY27

Current Progressing as planned, operations expected to commence in Q1 FY27.

Target Commercial operations commenced.

Why it matters

This is a key pillar of the export strategy, enhancing proximity to European customers and competitiveness.

On the international front, our wholly-owned subsidiary in Spain is progressing as planned, with commercial operations expected to commence sometime in Quarter1 financial year '27.

Risks & concerns

Delay in capacity expansion due to construction restrictions
medium

1.5 million unit capacity expansion deferred by one quarter from Q1 FY27 to Q2 FY27 due to temporary pollution-related construction restrictions in Delhi region.

Management acknowledged
Fluctuations in raw material prices (styrene)
medium

Styrene prices, which were down in December, started going up again in January due to geopolitical situations, though management expects to maintain margins through product mix.

Both acknowledged

Q&A highlights

8 direct

Impact of marketing spend on EBITDA and normalization Direct

the marketing and advertising expenses were the biggest factor on increase in the other expenses. It will almost close to INR 5 crores incremental over quarter-over-quarter and that was a drag on the EBITDA but still I think EBITDA was healthy during the year.

Clarifies the reason for increased other expenses in Q3 and its impact on profitability, with an expectation of lower spend in Q4.

Asked by Jyothi Singh

ASP trends and product mix impact on margins Direct

So we are not expecting EBITDAs to go down because it is also a product mix play, right. So in our industry, because of I mean the products, ASP is so different that with a change in product mix, we are able to maintain, and I think we are seeing a good tailwind on a better product mix and a better premiumization.

Explains how the company plans to maintain or improve margins despite potential raw material price fluctuations, highlighting the importance of product mix and premiumization.

Asked by Jyothi Singh

European market entry strategy and ASP improvement Direct

the plan is that there are certain markets where either we do not have distributors, or the distributors are not strong. So, we want to go directly to the dealers as well. So, what it does is that in those markets, your average realization is much higher, because you do not have a distributor and you are going to the retail shop directly.

Details the rationale behind the Spain subsidiary and direct-to-dealer model in certain EU markets, which is expected to boost ASPs and competitiveness.

Asked by Sridhar Kalyani

Capacity expansion plans and associated capital outlay Direct

So, our current capacity, we have just increased in last 2 months from 9 million to 9.5 million... The first phase will bring an additional capacity of 1.5 million, which was to start in quarter 1 of 2027. But now we will start in quarter 2 of 2027... And then in financial year 2028, the second phase... will increase from 11 million to 12.5. Overall, there is an increase of 3 million. And the budget outlay is about INR155 crores, out of which INR80 crores have already been spent.

Provides a clear roadmap for future capacity growth and the associated investment, indicating long-term growth strategy.

Asked by Lakshmi Narayan KG

Profitability difference between Studds and SMK brands Direct

So, EBITDA margins, I would say a range for studds would be anywhere between 17.5%, 18% to 20%. And for SMK, depending on the models in the markets, between 30% to 35%.

Gives insight into the margin profiles of the two main brands, explaining why the company prioritizes SMK sales when supply-constrained.

Asked by Ishpreet Kaur

Strategic shift towards non-helmet accessories and sporting helmets Direct

So, that is the plan from the company as well. So, two segments. One is obviously the sporting helmets, which is again helmets, but not motorcycle because the technology uses slightly different. So, that we have signed up with Decathlon and within this quarter, the first pilot production will happen.

Reveals a new growth avenue and partnership with Decathlon, diversifying the product portfolio beyond traditional motorcycle helmets.

Asked by Ishpreet Kaur

Competitive landscape and market consolidation in India Direct

In India, you said three players control 65% to 70% of the market. How has that market consolidated, let's say, over the last five to 10 years... this number has been continuously consolidating. This number as of a 2018 report was about 40% to 45% in 2018-19. And I think if you go back to 2014-15, this number would be larger than 50%. So, this consolidation is constantly happening.

Provides historical context on market consolidation and indicates a trend towards a more organized market dominated by a few players, which is favorable for established companies like Studds.

Asked by Anuj Sehgal

Brand building strategy, especially in the domestic market Direct

So, I would say, I treat the product as an experience for the consumer because it's also, again, I would like to mention that the fitment of a helmet is also very important... So, if you think that your product is not like an industrial product and it's an experience that you're selling to the consumer, the mindset completely changes of the company and the consumer both.

Highlights the company's focus on product experience and fitment as key drivers for brand equity, moving beyond traditional advertising, especially in the domestic market.

Asked by Lakshmi Narayan KG

3 min read 8 chapters

Detailed narrative

Q3 FY26 Financial Performance Overview

Consolidated revenue grew 9.4% YoY to INR 163 crores, with EBITDA increasing 20.1% YoY to INR 30.7 crores. EBITDA margins expanded by 160 basis points YoY to 18.8% from 17.2% in Q3 FY25, driven by favorable raw material prices, procurement efficiencies, and an improved product mix. PAT saw a 26.3% YoY growth, reaching INR 20.7 crores, with PAT margins at 12.7%.

Nine-Month Financial Performance and ASP Trends

For the nine months ended December 31, 2025, consolidated revenue stood at INR 466.7 crores, up 7.5% YoY, with EBITDA at INR 90.9 crores (up 18.5% YoY) and PAT at INR 61.6 crores (up 23.9% YoY). The blended ASP for helmets for the nine-month period was INR 770, up from INR 747 in the previous year, with a target to exceed INR 800 next year, indicating a focus on premiumization and product mix improvement.

Capacity Expansion and Operational Optimization

The company recently increased its installed capacity from 9 million to 9.5 million units. Further expansion is planned in two phases, adding 1.5 million units by Q2 FY27 (delayed by one quarter due to construction restrictions) and another 1 million units by FY28, reaching a total of 12.5 million units. The total capital outlay for this expansion is INR 155 crores, with INR 80 crores already spent and INR 15 crores expected to be spent in the current fiscal year.

International Expansion and Export Strategy

Studds' wholly-owned subsidiary in Spain is progressing as planned and is expected to commence commercial operations in Q1 FY27. This initiative aims to enhance proximity to European customers, improve turnaround times, and strengthen competitiveness by directly targeting markets without strong distributors. The proposed India-EU free trade agreement is also anticipated to provide a significant long-term tailwind for export-led growth, offering an estimated 2.5% advantage on customs duty.

Brand Building and Product Diversification

Q3 saw increased advertising and marketing investments, including participation in marquee global platforms like EICMA in Italy and domestic events such as India Bike Week, to strengthen brand visibility and customer engagement. The company is also diversifying into sporting helmets, having signed with Decathlon for pilot production this quarter. Management expects accessories to become a larger part of the business, with motorcycle helmets projected to constitute 70-72% of revenues in 2-3 years, down from the current 85%.

Market Dynamics and Competitive Landscape

The Indian helmet market is currently 60% penetrated, offering significant room for growth, particularly in the faster-growing premium segment. The commuter segment is largely oligopolistic, with Studds, Vega, and Steelbird collectively holding 65-70% market share. Management anticipates continued market consolidation, with the unorganized market share potentially reducing to 15-20% as established players benefit from economies of scale and regulatory developments.

Margin Drivers and Product Mix Strategy

Gross margins improved significantly to 61.4% in Q3 FY26, up from 56.8% in Q3 FY25, primarily due to favorable raw material prices, better procurement efficiencies, and an improved product mix. Management emphasized that product mix and premiumization are key to maintaining and improving EBITDA margins. SMK products offer significantly higher EBITDA margins (30-35%) compared to Studds (17.5-20%), and the company aims to increase SMK's revenue contribution from 13% to 25% in 2-3 years.

OE Business and Domestic Market Strategy

The OE segment currently accounts for approximately 13% of total revenues, with an OE ASP of INR 522 and EBITDA margins of 11-13%, which are lower than the general market. The company's domestic brand-building strategy focuses on product experience, fitment, and direct interaction with riders at events like India Bike Week, leveraging word-of-mouth recommendations among premium riders, rather than relying solely on heavy advertising.

This is an AI-generated summary of a publicly available earnings call transcript.

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