Studds Accessories IPO

It is the world’s largest two-wheeler helmet player by volume (Calendar Year 2024) and holds a significant domestic market share of 27.3% by volume and 25.5% by value (FY24). This dominant position provides a strong competitive advantage and high brand visibility.

Its EBITDA Margin significantly improved to 17.96% in FY25 (up from 12.03% in FY23). This enhanced operational efficiency is complemented by a strong Return on Capital Employed (RoCE), reaching 20.25% in FY25.

It demonstrates accelerated growth, with its profit increasing at a 44.9% CAGR between FY23 and FY25. Revenue also grew steadily, reaching ₹595.9 crore at a CAGR of 8.5% in FY25.

The vertically integrated operational structure helps control costs and quickly adapt operations. This efficiency, combined with high brand recall, minimizes marketing needs, keeping advertising and sales promotion costs low at just 2.33% of total expenses in FY25.

It sells products across more than 70 countries globally as of August 31, 2025. Export sales are increasing, representing 22.77% (₹33.97 crore) of revenue in the three months ended June 30, 2025, diversifying its market exposure.

The core manufacturing units operate efficiently, achieving high utilization rates, such as 92.95% at Manufacturing Facility I and 89.37% at Facility II in FY25. This high scale enables the company to effectively minimize the cost of production per unit through economies of scale.

Its balance sheet shows efficient debt management, evidenced by a negative Net Debt to Equity ratio of (0.07) in FY25. Total borrowings stood at ₹2.91 crore as of March 31, 2025, against ₹30.6 crore in FY23.

Its entire manufacturing base relies on four operational facilities concentrated in Faridabad, Haryana. This geographic concentration exposes all production to severe disruption risks from local industrial disputes, natural disasters, or power failure in that region.

Raw material costs accounted for 52.34% of total expenses in FY25. Furthermore, the top 10 suppliers contributed 51.08% of raw material costs in FY25, and generally, it avoids long-term supply agreements, exposing it to potential supply disruptions and volatile pricing.

It has instances of non-compliance, specifically regarding share allotments that were not compliant with Section 67(3) of the Companies Act, 1956. Delays in filings (e.g., Form FC-GPR for NRI shareholders) may lead to subsequent monetary penalties or regulatory actions.

The IPO is structured entirely as an offer for sale of up to 77.86 lakh equity shares. Consequently, the company will not receive any cash proceeds from the IPO; all funds, after offer expenses, will go to the selling shareholders.

Its revenue stability relies heavily on successful models; the top 15 selling helmet models generated 76.08% of revenue from operations in FY25. Misjudgment of consumer trends led to failed products, for instance, designs for products such as 'Stellar - Wings' were noted as "not well received by customers" across the three months ended June 30, 2025, and fiscal years 2025, 2024, and 2023. This misjudgment risked excess, obsolete inventory and the need for markdowns. The company has also previously been unable to market other designs, such as the Sportster two-wheeler luggage and the Scorpion two-wheeler helmet, because these were not well received.

The increasing presence of online retailers leads to deep discounting, which can negatively impact the company's brand positioning and pricing ability. E-sellers have sold products at deep discounts, including providing discounts of up to 36% of the maximum retail price. This aggressive pricing, if perpetual, could cause a devaluation of its premium ‘SMK’ brand equity, which is strategically positioned to cater specifically to the premium two-wheeler helmet market segment.