Studds Accessories: Antique Stock Broking Initiates Coverage with 40% Upside Target
Antique Stock Broking has initiated coverage on Studds Accessories with a Buy rating and a target price of ₹750 per share, implying about 40% upside from current levels around ₹535–540. The brokerage sees Studds transitioning from a volume‑driven manufacturer to a premium‑branded compounder, backed by a 25% domestic market share, regulatory tailwinds, export growth and improving capital efficiency.
Antique’s Investment Thesis
Antique highlights Studds’ shift to premiumisation via the SMK brand, targeting aspirational Indian riders and Europe’s mid‑market segment, which should lift average selling prices and margins.
The brokerage projects EBITDA CAGR of 16% from FY25 to FY28, driven by value‑added products rising from 14% to 20% of sales mix, alongside volume growth from capacity expansion.
Return on capital employed (ROCE) is expected to improve from 18.7% in FY25 to 21.4% by FY28, reflecting disciplined capex and operational leverage in a structurally growing helmet market.
Company Overview and Market Position
Studds Accessories is India’s largest two‑wheeler helmet maker with nearly 25% domestic market share and a blended installed capacity of about 9 million units, positioning it to capture industry tailwinds like premiumisation and safety regulations.
The company operates two main brands: the mass‑market Studds (₹825–2,165 for Asia/Africa) and premium SMK (₹1,800–8,900 for Europe/Latin America), with exports forming a key growth lever.
Globally, Studds holds a 10.6% market share in helmets, with four state‑of‑the‑art plants producing up to 14 million units annually and a rigorous 25‑check quality process yielding <1% rejection rate.
Recent Financial Performance
In Q2 FY26 (ended Sep 2025), consolidated revenues rose 6.3% YoY to ₹154.4 crore and 3.5% QoQ, while EBITDA grew 12% YoY to ₹29.9 crore with margins expanding to 19.3% from 18.4%.
H1 FY26 revenues climbed 6.4% YoY to ₹303.7 crore, EBITDA up 17.9% to ₹60.2 crore, and net profit surged 22.9% to ₹40.9 crore, driven by better product mix and cost discipline.
FY25 saw steady revenue growth with FY24–25 net sales at around ₹4,625 crore historically, supported by disciplined marketing (2.5% of revenue) and strong ROE in the mid‑teens.
Growth Drivers: Premiumisation and Capacity
Value‑added products are projected to rise from 14% in FY25 to 20% by FY28, boosting ASPs and EBITDA margins amid structural shifts toward safety and aspirational consumption.
Studds plans phased capacity expansion of 1.5 million units to reach 10.5 million by FY28, with first phase ramping up in H2 FY27 without straining the balance sheet.
Sales/marketing spend will double to ~5% of revenue, funding global distribution and new product development, while capex of ₹100 crore in India and €2 million in Europe targets export scalability.
Export and Regulatory Tailwinds
Exports benefit from Europe’s mid‑market positioning via SMK and India’s regulatory push for helmets, with the global helmet market growing at 6.5% annually and India’s at 2.4% CAGR to $870 million by 2028.
Management guides for 9–10% revenue growth in FY26, anchored in exports and premium mix, with EVs adding tailwinds for new accessory designs.
Valuation and Antique’s Upside Case
| Metric | FY25 Actual | FY28E (Antique) | Valuation Multiple |
|---|---|---|---|
| P/E | N/A | 18x | Undervalued for growth |
| ROCE | 18.7% | 21.4% | Improving efficiency |
| EBITDA CAGR | N/A | 16% | Premiumisation driven |
| Target Price | Current ~₹535 | ₹750 | 40% upside |
At ~18x FY28E earnings, Antique views Studds as undervalued given its growth visibility, premium shift, and rising returns in a structurally favoured industry.
The brokerage sees disciplined capex, premiumisation and exports as key re‑rating catalysts, positioning Studds as a high‑quality auto ancillary/consumer compounder.
Key Risks
Cyclical two‑wheeler sales slowdown could pressure volumes, though premiumisation and exports provide buffers.
Rising raw material costs or competition in exports could squeeze margins if pricing power weakens.
Execution on capacity ramp and marketing scale‑up remains critical to hitting projected growth and ROCE targets.
Antique’s 40% upside call frames Studds as a structural play on safety regulations, premium consumption and export leverage, rewarding investors who buy into its transition from volume to value.
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