Antique Stock Broking has initiated coverage on Studds Accessories with a ‘Buy’ rating and a target price of INR 750 per share, implying ~38% upside from the prevailing price band around INR 544.
The initiation thesis is straightforward: Antique argues Studds is transitioning from a largely volume-led helmet manufacturer into a branded, premium consumption compounder, supported by structural tailwinds in the domestic helmet market and an export strategy that could lift realisations and diversify earnings.
Highlights of Antique’s Coverage on Studds: Premiumization + Formalisation + Exports
Studds Accessories is described as India’s largest helmet manufacturer, with a blended installed capacity of ~9 million units and ~25% domestic market share. Antique positions the company at the intersection of four longer-duration trends:
- Premiumisation (higher ASPs, value-added products, stronger branding)
- Regulatory support (formalisation through compliance and enforcement)
- Export scalability (improved distribution model and better realizations)
- Improving capital efficiency (rising returns on incremental capital deployed)
In Antique’s framing, these drivers collectively shift Studds Accessories from a cyclical manufacturing narrative to a more durable “branded consumption” narrative—one that can sustain higher earnings visibility and, therefore, a higher valuation multiple.
The Premium Bet: SMK-Led Uptrading and Richer Mix
A key pillar of the report is Studds Accessories’ premiumisation strategy, led by the SMK brand. Antique notes SMK targets aspirational riders in India and the mid-market segment in Europe, making it central to both the domestic uptrading theme and export growth.
The brokerage expects the share of value-added products (higher-margin portfolio) to rise from ~14% in FY25 to ~20% by FY28. That mix shift, combined with price-led growth, underpins Antique’s expectation of:
- ~16% EBITDA CAGR over the FY25–FY28E period (the report also references FY24–FY28 in certain places, but the core CAGR framing remains consistent around mid-teens).
- RoCE expansion from ~18.7% to ~21.4% by FY28E.
Antique’s larger forecast set (as stated in the initiation note) points to CAGRs of ~12% in volumes, ~14% in revenue, ~16% in EBITDA, and ~19% in PAT over FY25–FY28E—suggesting a model where both operating leverage and product mix do the heavy lifting.
Regulatory Tailwinds: The Formalisation Accelerant
A second major catalyst is regulation-driven industry formalisation. Antique highlights:
- Mandatory BIS certification
- Stricter enforcement against non-ISI helmets
- Proposed norms such as mandatory sale of two helmets with every two-wheeler
The argument is that regulation does not merely support baseline demand; it actively pushes consumers toward certified, branded and safer products, thereby accelerating uptrading. As the market leader with scale and reach, Studds Accessories is positioned to capture disproportionate gains from consolidation and compliance-led shifts.
Antique also flags Studds Accessories’ distribution strength, citing more than 350 touchpoints, which matters in a category where availability, fit/comfort trials, and brand recall influence purchase decisions.
Capacity Expansion: Growth without Balance Sheet Strain
On the supply side, Studds Accessories is undertaking a 1.5 million unit capacity expansion in two phases, taking total installed capacity to ~10.5 million units by FY28.
Antique expects Phase 1 ramp-up to begin around late FY27 / H2 FY27 (the coverage note references H2 FY27, while one news version mentions H2 FY26–27; the practical implication is similar—incremental volume visibility in the run-up to FY28).
The brokerage’s constructive view is based on two points:
- Capacity is being added to meet visible demand without “build it and they will come” risk, and
- The expansion is planned in a way that avoids undue balance sheet stress.
Europe Strategy: From Distributor-Led to Hybrid Dealer-Direct
Exports are framed as a margin-accretive growth lever, and Antique places meaningful emphasis on the company’s European expansion plan.
Studds is setting up a European subsidiary in Spain, enabling a shift from a distributor-led export model to a dealer-direct hybrid model in key markets such as Italy, Germany, and France. The intent is to improve control over channel execution and pricing, lift export ASPs, and scale volumes.
Management targets a doubling of export volumes by FY29, alongside a “sharp” improvement in export realisations—ingredients that would support both profit growth and valuation re-rating if executed well.
Capital Allocation: Capex Plus Stepped-up Branding
Antique highlights “disciplined capital allocation” as another core strength. The planned investments include approximately:
- ~INR 100 crore in India and ~EUR2 million in Europe over FY26–FY29 (the initiation note also frames this as FY27–FY29E in places), focused on capacity expansion, global distribution, and new product development.
In parallel, Antique expects sales and marketing spend to rise from roughly ~2.5% of revenue to about ~5%—a deliberate bet on brand-building and premium positioning. Importantly, Antique believes higher ASPs should help protect margins even as brand investments rise.
Valuation Call: “18x FY28E Looks Cheap If the Story is Structural”
At the time of initiation, Antique estimates the stock is trading at around ~18x FY28E earnings and argues this undervalues Studds’ structural growth visibility, improving mix, and rising return profile.
Antique’s valuation framework is explicit: it believes Studds deserves a sustainable multiple of roughly 25x FY28E EPS, reflecting its evolution into a branded, safety-led consumption franchise—supporting the INR 750 target.
The initiation note also presents forward valuation markers: P/E stepping down from the mid-20s to high-teens over FY26E–FY28E, EV/EBITDA trending down as earnings grow, and dividend yield moving into the ~1%+ range as cash generation improves.
Studds Accessories Post–IPO Performance
Studds Accessories launched its IPO in October 2025, with an issue size of INR 455.49 crore. The offering received an exceptionally strong response from investors, achieving an overall subscription of approximately 73 times.
Despite the robust demand, the stock listed at a discount of 4.22% on the listing day, opening at INR 560.30 compared with the IPO issue price of INR 585 per share. Since listing, the stock has been consolidating within a price range of INR 518 to 574 per share. At present, it is trading at around INR 541.90, representing a discount of approximately 7.36% to its IPO price.
Key Risks
The key risks to monitor include:
- Premiumisation execution risk: sustaining mix upgrades and pricing without losing volumes in a competitive category.
- Regulatory implementation risk: timing and enforcement intensity can vary; formalisation tailwinds may arrive unevenly.
- Europe strategy risk: building dealer-direct capabilities, channel relationships, and brand traction requires time and investment; FX and operating complexity can dilute near-term gains.
- Input cost volatility and competitive intensity: helmet manufacturing margins can be sensitive to raw materials and price competition.
- Demand cyclicality in two-wheelers: while safety and compliance are structural, broader discretionary sentiment can still influence premium categories.
Bottom Line
Antique’s coverage on Studds positioned the company as more than a manufacturing scale play: it is pitching a brand-led compounding story in a category where safety awareness, regulatory formalisation and premiumisation are reshaping consumer behaviour. If Studds Accessories delivers on a richer mix (SMK-led), export ASP improvements, and capacity-driven growth without margin dilution, Antique believes the stock’s current valuation does not reflect the company’s medium-term earnings trajectory—hence the ‘Buy’ call with an INR 750 target, implying ~40% upside.
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