Summary
Studds Accessories Limited - Q3 FY26 Earnings Call Summary Monday, February 02, 2026 4:00 PM
Event Participants
Executives Bharat Goyal, Manish Mehta, Sidhartha Bhushan Khurana
Analysts Anuj Sehgal, Ishpreet Kaur, Jatinder Agarwal, Jyothi Singh, Lakshmi Narayan KG, Sridhar Kalyani
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Sales Volume (Helmets/Boxes) | 2.24 million units | +9.4% YoY; Q3 usually sees higher volumes due to festive and year-end demand. |
| Consolidated Revenue | ₹163.0 crores | +9.4% YoY; Driven by volume growth and improved product mix. |
| Gross Margin | 61.4% | +460 bps YoY; Benefited from favorable RM prices and procurement efficiencies. |
| EBITDA | ₹30.7 crores | +20.1% YoY; Despite ₹5 crore incremental marketing spend, margins remained resilient. |
| EBITDA Margin | 18.8% | +160 bps YoY; Economies of scale offset higher advertising investments. |
| Profit After Tax (PAT) | ₹20.7 crores | +26.3% YoY; Strong operational performance translated to bottom-line growth. |
| PAT Margin | 12.7% | +170 bps YoY; Improved from 11% in Q3 FY25. |
| Capacity Utilization | 96.0% | Sharp increase from 9-month average of 85%, indicating near-full utilization. |
| Total Installed Capacity | 9.5 million units | Increased from 9.0 million units following recent machinery additions. |
| Average Selling Price (ASP) | ₹770 | +3.1% YoY (from ₹747); Reflects ongoing shift toward premium SMK brand. |
Geographic & Segment Commentary
- Domestic Market: Recorded a blended ASP of ₹675, with Studds brand ASP at ₹671. Management notes the market is currently 60% penetrated, with the premium segment growing faster than the mass commuter segment.
- International/Exports: Blended export ASP stood at ₹1,601, significantly higher than domestic. The SMK brand ASP reached ₹2,359, reflecting its premium positioning in global markets.
- European Expansion: Strategy involves a wholly-owned subsidiary in Spain (operations starting Q1 FY27) to target direct-to-dealer sales in Germany, Italy, and France. Management targets increasing European volumes from 120k to 300k units in 2-3 years.
Company-Specific & Strategic Commentary
- Premiumization Strategy: Shifting revenue mix toward the high-margin SMK brand (30-35% EBITDA vs Studds’ 18-20%). SMK revenue share is targeted to reach 25% in 2-3 years, up from 14% currently.
- Capacity Expansion: Progressing with a ₹155 crore capex plan for a new facility to add 3 million units in two phases by FY28. Phase 1 (1.5 million units) is deferred by one quarter to Q2 FY27 due to construction restrictions.
- Diversification: Entering the sporting helmet category through a partnership with Decathlon (7 million unit global seller). Pilot production for non-motorcycle helmets is scheduled for the current quarter as a de-risking move from China.
- Brand Building: Significant investment in global racing (Latin America Cup, “Road to MotoGP”) and domestic events like India Bike Week to build “safety and experience” equity rather than just mass advertising.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Revenue Growth | 12-13% CAGR | Expected to outpace motorcycle market growth (7-8%) due to penetration gains. |
| Blended ASP | >₹800 by FY27 | Driven by higher SMK volumes and planned price hikes of 2-3%. |
| Export Mix (Revenue) | 35-40% of incremental | Future growth will be heavily weighted toward high-value international sales. |
| Commercial Ops (Spain) | Q1 FY27 | Warehouse and distribution setup to reduce door-to-door delivery from 70 days to 2 days. |
Risks & Constraints
| Risk | Context |
|---|---|
| Raw Material Volatility | Styrene prices started rising in January 2026 due to geopolitical factors and Brent crude fluctuations. |
| Regulatory Delays | Construction restrictions in the Delhi region (pollution-related) have already delayed capacity expansion by one quarter. |
| Competition | Intense competition in the global entry-to-mid segment from Chinese (LS2) and Indonesian (KYT) players. |
Q&A Highlights
Domestic vs. Export Profitability
- Question: What is the margin profile of the two brands? (Ishpreet Kaur)
- Answer: Studds brand EBITDA margins range from 17.5% to 20%, while the premium SMK brand delivers 30% to 35% EBITDA (Sidhartha Khurana).
Strategic Rationale for Spain Subsidiary
- Question: Why move to a direct distribution model in Europe? (Jatinder Agarwal)
- Answer: Currently, delivery takes 60-70 days. The subsidiary allows for 2-day delivery to dealers. Direct-to-retail realization is also higher as it captures the distributor’s margin (Sidhartha Khurana).
OEM Relationship and Pricing
- Question: What is the market share and realization in the OE segment? (Lakshmi Narayan KG)
- Answer: Studds holds a 23% market share in OEs (No. 2 player). OE ASP is ₹522 compared to the dealer ASP of >₹675. OE margins are lower at 11-13% EBITDA (Sidhartha Khurana).
New Product Segments
- Question: How big is the opportunity with Decathlon? (Ishpreet Kaur)
- Answer: The global sporting helmet market is ~$1 billion; Decathlon alone sells 7 million units. Studds is positioning as an India-based alternative to Chinese suppliers for these non-motorcycle helmets (Sidhartha Khurana).
Key Takeaway
Studds Accessories Limited delivered a resilient Q3 FY26, with revenue growing 9.4% YoY to ₹163 crores and PAT increasing 26.3% to ₹20.7 crores, despite heavy seasonal brand investments. The company is successfully navigating a transition toward premiumization, with the high-margin SMK brand now contributing 14% of volumes and supporting a blended ASP of ₹770. Operationally, the firm is running at a near-peak capacity of 96%, necessitating a ₹155 crore expansion to 12.5 million units by FY28. While RM volatility in styrene and temporary construction delays in North India pose near-term hurdles, the strategic shift toward direct European distribution and diversification into sporting helmets via Decathlon provides a clear path for margin-accretive growth. Management remains confident in achieving a blended ASP of over ₹800 by FY27 as it deepens its engagement with the global racing community.
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