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RATING

RECOMMENDATION

Strong Buy

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RATING

RECOMMENDATION

Strong Buy

Business Type

Dominant Leader

  • Studds Growth

Get detailed information about the Studds Pre IPO Unlisted shares. In this research report, you will get to know about  Studds peer comparison data. In addition, get the Complete details about the Net Profit Growth, Revenue Growth and Book Value Growth. 

Studds Revenue Growth

Growth in %

  • 15.22%

    1 Year

  • 12.31%

    3 Year

  • 10.55%

    5 Year

Despite the adverse market climate, two factors sustain the gradual increase in overall income. First, higher average foreign exchange rate in FY21 than in previous years, which led to a 53.3 percent increase in total exports. Second, increased marketing and advertising expenditure in India, which contributed to an 11 percent increase in inland sales despite the challenging environment.

Studds Net Profit Growth(PAT)

Growth in %

  • -0.75%

    1 Year

  • 31.04%

    3 Year

  • 24.55%

    5 Year

PAT has been slightly reduced from the previous year due to COVID-19 as the company was not able to continue its operations for many months during the pandemic. Also, depreciation has increased as the company added a new plant in FY21. Inflation was 6.8% in FY21 and heavy use of ABS, polycarbonate, and EPSL, materials used for manufacturing to meet the rise in demand for Studds helmets in foreign markets, led to a 17.8% rise in the operational cost of the company. Though all these change are to meet the untapped demand and expected to yield greater returns in future

Studds EPS Growth

Growth in %

  • -0.74%

    1 Year

  • 31.05%

    3 Year

  • 24.55%

    5 Year

The EPS has decreased slightly from 37.89 in FY20 to 37.61 in FY21 due to a 0.71 percent decrease in net income in FY21. Despite significant revenue growth of 15.22%, total assets climbed by 51%, causing depreciation on those assets to increase by 83 percent, resulting in greater reported expenses. Employment benefits grew by 9 Cr in FY21, mostly due to employee welfare spending due to the COVID-19 impact, which slowed EPS growth in FY21.

  • Studds Book Value Growth

Growth in %

  • 35.25%

    1 Year

  • 35.23%

    2 Year

The accumulated retained earnings over the years of the company have been driven by the consistent revenue generation of the company with CAGR 10.4 percent for 5 years driven by economies of scale and extensive backward integration process, which has allowed better quality of the helmets throughout the years, resulting in a 35.3 percent increase in book value per share from the previous FY20.

Studds EBITDA Growth

Growth in %

  • 11.06%

    1 Year

  • 25.98%

    3 Year

  • 21.68%

    5 Year

The significant increase in EBITDA is due to the increased earnings of the company. The increased exports contributed majorly to increasing revenue in 2021. The direct outcome of economies of scale and synergies of manufacturing goods in one place has been the absolute value of increased sales, which is about three times greater than the increased expenses. 

Studds Operating Profit Growth

Growth in %

  • 5.60%

    1 Year

  • 25.22%

    3 Year

  • 20.95%

    5 Year

The significant increase in operating profit is due to the increased earnings and revenue of accessories, protective gear, and newly launched helmets, which were exceptionally good in FY21. Manufacturing facilities are located in close proximity to each other, which creates synergy in their manufacturing processes and leads to economies of scale for producing more helmets, thus generating more operating profits for the company.

Studds Asset Growth

Growth in %

  • 25.07%

    1 Year

  • 24.94%

    3 Year

  • 28.55%

    5 Year

The gradual increase in the asset base of the company is primarily due to the increase in the current asset group of the company by 51%. The company increased their inventories because they are growing more confident about the two-wheeler market in India. The market for two-wheeler helmets is expected to grow by around 25%.

Studds Cash Flow from Operations

Growth in %

  • 18.89%

    1 Year

  • 19.69%

    3 Year

  • 16.27%

    5 Year

Cash flow from operations has increased but the primary reason that it is higher than in FY20 is the increase in the movement of trade and trade payables of the company that stands at Rs 125.75 Cr against Rs 40.35 Cr in FY20, which shows that it increased by more than 2x and the rise in the depreciation of Rs 6 Cr from the previous year FY20. These changes have been made because of the expansionary plans of the company.

  • Studds Solvency Ratios

Studds D/E Ratio

The lower debt to equity has been brought down because of the term loan the company had taken from HDFC for Rs 39 Cr, which now has a balance of Rs. 27 Cr at the end of FY21. That shows their ability to pay off the existing loan on the company, which has improved the debt to equity ratio of the company.

Studds Current Ratio

The marginal decrease in the current ratio is because the company has increased its payable due to creditors other than MSME for their operations, which has reduced the current ratio, but it is higher than 1, which is a positive sign for the company as it is capable of paying its current liabilities with its current assets.

Studds Quick Ratio

The high marginal decrease in the quick ratio is because the company has a high inventory. This high inventory is to meet its future demand, which is the reason their inventory composition is mostly comprised of raw materials instead of finished goods. Raw materials contribute 68% of the total inventory, which grew from 39% in FY20 to FY21. However, the quick ratio is higher than 1, which is a good sign in terms of the solvency of the company.

Studds Interest Coverage Ratio

The interest coverage ratio has decreased from the previous year as EBIT has increased in FY21, but in FY21 the company has paid more on its term and vehicle loan, which has increased the interest expense of the company. However, the term loan that they have taken had a moratorium period of one year, which when started has increased the interest expense of the company.

  • Studds Operating Efficiency

The company's overall operating efficiency has decreased marginally. When looking at the absolute numbers, revenue grew by 15.2 percent, EBITDA grew by 11%, and EBIT grew by 6%. However, due to the term loan as well as the increase in assets to strengthen their efficiency for the future, the company has increased the interest amount and expenses, resulting in a net profit decrease of less than 1%, indicating the company has a positive outlook for its future, which has been impacted currently.

Studds Operating Profit EBIT Margin(OPM)

Studds Profit Before Tax Margin (PBT Margin)

Studds Profit After Tax Margin (PAT Margin)

  • Studds Profitablity Ratio

Studds Return on Equity(RoE)

The significant decrease in ROE is primarily because of the decrease in the ability of the assets to generate income as well as the low profit margin in FY21, which have contributed to the downfall of ROE. Low profit margins and low asset turnover, as previously mentioned, were due to operation restraints due to COVID-19. 

Studds Return on Capital Employed(RoCE)

The decline in ROCE is mostly due to the company's expansionary goal, which involves developing new and improved gears using its assets, which has increased the company's current liabilities. Because it takes a long time to capitalise on such investments, the company's net profits have remained flat, but are likely to rise in the future.

Studds Return to Assets (RoA)

The decrease in ROA has been primarily because of the rise in net addition of Rs 60 Cr for building costs, which couldn't produce synergies in the short term, but eventually it will become a contributing factor to increasing the net profits of the company in the long term. 

  • Studds Valuation Ratios

Studds Dividend Yield

Studds Earning Yield