STUDDS

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%.

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.

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.

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.

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%.

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.

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.

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.