Studds Accessories
IPO Size: Rs. 455 Cr, Entirely Offer for Sale (OFS)
- 86% OFS by the promoter (79% stake to drop to 62% post IPO)
- 14% OFS by individual shareholders, mostly company dealers
Price band: Rs. 557-585 per share
M cap: Rs. 2,302 cr, implying 20% dilution
IPO Date: Thu 30th Oct to Mon 3rd Nov 2025, Listing Fri 7th Nov 2025
Grey Market Premium (GMP): We are strongly against ‘grey market premium’ as it is an unofficial figure, against SEBI guidelines.
India’s Largest 2W Helmet Maker
Studds Accessories one of world’s largest two-wheeler (2W) helmet manufacturers, by volume, enjoying 25.5% domestic value market share and 11% global value market share. Having 9 million units per annum manufacturing capacity at Faridabad, Haryana, company sells helmets under 2 brands – mass market ‘Studds’ and premium category ‘SMK’. Its network of 363 distributors accounts for nearly 60% of Rs. 580 cr revenue, while partnership with OEMs such as Honda, Yamaha, Royal Enfield contributes 15% of revenue.
Strengthening Performance
Despite this being company’s 2nd attempt at IPO (1st filing in 2018), EBITDA margin has improved 240 bps in past 7 years, with net profit growing at 11% CAGR. Also, this time, no fresh issue of funds is being sought and expansion is being funded through internal resources, as company’s net worth has increased ~4x, from Rs. 120 cr in Mar 2018 to Rs. 470 cr,as of June 2025.
With 87% utilization of present capacity, Studds is augmenting its capacity by 3 million units pa - 50% of which will be operational by March 2026 and balance a year thereafter. This has potential to increase revenue by an estimated 20% pa FY27E onwards.
Healthy Margins
FY25 revenue rose 10% YoY to Rs. 584 cr, with healthy margins - 56% gross, 18% EBITDA excluding other income and 12% net. FY25 PAT grew 22% YoY to Rs. 70 cr, with an EPS at Rs.18. For Q1FY26, it reported revenue of Rs. 149 cr, PAT of Rs. 20 cr resulting in net margin expansion to 13.5%, as gross margin expanded proportionately. First quarter EPS rose to Rs. 5.1.
Net worth as of 30.6.25, stood at Rs. 470 cr, of which, 18% or Rs. 87 cr is cash and equivalents (cash per share of Rs. 21)s. On 23% RoCE, RoE is strong at 17% for the ongoing fiscal.
Promising Micro-Cap Company
M cap of Rs. 2,300 cr and enterprise value of about Rs. 2,220 cr, leads to a PE multiple of 28.5x, on FY26E EPS of about Rs. 20. This is seen attractive for an established 5 decade old leader, with healthy growth visibility and expanding margins.
Q2FY26 domestic 2W sales have been encouraging with healthy monsoon keeping Q3 outlook strong. Being a critical safety equipment, helmet may also witness regulatory push, acting as strong industry tailwinds for the company. Studds is the largest in the 3 player domestic market, with Vega Auto and Steelbird Hi-Tech being the smaller domestic unlisted peers.
29th Oct 2025 at 10:55 pm
29th Oct 2025 at 10:30 pm
29th Oct 2025 at 08:09 pm