Unlisted Shares

Largest Helmet Player of India: The Company sells helmets under two brands, Studds and SMK. The brands focus on the mass-market commuter (Studds) and premium (SMK) segments. Studds two-wheeler helmets is the largest selling two-wheeler helmet brand in terms of volume of helmets sold in India, 6.41 million with a market share of 25.66% and additionally, exporting their helmets to 50 countries.

EBITDA Growth: The company has witnessed a healthy growth in EBITDA, escalating from ₹57.05 crore in FY22 to ₹64.42 crore in FY23, reflecting a growth rate of 12.92%. The company's eight-year Compound Annual Growth Rate (CAGR) stands at 15.38%.

Manufacturing KPIs: The company has demonstrated exceptional financial performance compared to its peers, with metrics such as cash conversion cycle* (5 year average between FY19-FY23 of -6 days vs industry average between FY18-FY22 of 87 days) and debt-to-equity ratio (5-year average between FY19-FY23 of of 14% vs industry average between FY18-FY22 of 43%)

*Cash conversion states the the time taken by the company to convert inventory into sales. Lower the CCC, better for the company

Profitability Ratios: The ROE of the company stands to be at 9.7% in FY23 as compared to 9% in FY22. Likewise, PAT increased from ₹28.64 in FY22 to ₹33.51 in FY23 showcasing a growth of 17.03%.

Studds Ventures into Bicycle Headgear: Studds has entered into the field of Bicycle Headgear. Rising emphasis on the use of non-polluting vehicles for short distance commutes by the governments across the world is anticipated to positively influence the market growth of bicycles. Company is expecting 1.5 million bicycle helmet production in a year in near future.

Investment Thesis: With the introduction of the new manufacturing facility in Sonipat to double the production and increase the penetration, the company anticipates attaining profits ranging from Rs. 114 crores to Rs. 131 crores by FY26. By using the industry's revenue multiple of 4.2x, the projected price is estimated to reach between Rs. 1,930 to 2,220 per share within a span of three years. This suggests a potential growth of 131% to 166% over the 3-year period.