Friday, 5 January 2018

STUDDS ACCESSORIES LTD – A LEADING HELMET BRAND IN INDIA


 Studds Accessories Ltd was incorporated in 1982 for manufacturing Helmets & 2 Wheeler accessories in India. STUDDS has become a world’s leading brand for Helmets and has emerged as India’s leading helmet and bike accessory brand that sets benchmarks in the industry, and leads the way with a network of dealerships across the country. Studds Accessories also exports its products to Latin America, Europe, Africa, Middle East, Far East etc nearly more than 35 Countries across the globe. STUDDS has a market share of approx. 10% in the city like New Delhi, wherein in Mumbai, it has commanded a market share of 70 – 80%.

Studds Accessories with its manufacturing unit spread over ~ 24,000 Sq Mtrs and an in house testing laboratory in Haryana manufactures around 6 million helmets every year. Studds Accessories Ltd manufactures range of helmets and two-wheeler accessories (i.e full face, flip up full face, off road full face, open face sporting and industrial) is the largest in the segment, and it keeps evolving with every passing year. Thus catering to all type of customers need suiting their budget and requirements.

FUTURE OUTLOOK OF COMPANY
  • Recently STUDDS has launched an international brand SMK with focus on European & western market and it is doing very well. . SMK helmets are designed and developed in Europe by the best, expert designers, before being produced by Studds.This is a premium segment product with higher margin which in turn will help to increase the bottom line by 2018.
  • Studds Accessories is planning to open a new production unit at IMT Faridabad which shall be expected to have capacity of production higher than the current unit. This production unit once started shall contribute to top line growth making STUDDS a market leader.


FINANCIAL HIGHLIGHTS – (Fig. in Crs)
PARTICULARS
2017
2016
2015
TOTAL INCOME
274
258
181.17
PAT
24
25
10.49
EPS
217.63
224.21
95.95
EQUITY
1.09
1.09
1.09
FACE VALUE
10
10
10
BOOK VALUE
788.35
581.53
366.90
DIVIDEND (%)
90%
80%
-


CONCLUSION AND VALUATION OF STUDDS:
  1. Competitors of Studds Accessrories Ltd are Vega, Steelbird, CEAT, Aerostar, Wrangle etc. There is no helmet manufacturing companies listed on BSE/NSE. Company has achieved a CAGR growth of 20-25% over the period of 3 years , soo if we consider the same CAGR growth for next 1 to 3 Years along with PE-25 TO 30 (Listed Auto Ancillaries – Industrial PE -50 TO 75+) , P/BV -5 to 6X and MCAP/Total Income – 1.5 to 2x than one can assume the pricing of Studds to be around Rs.10,000+ per share.
  2. Government Measures - Due to humid weather and faulty designs of helmets, the government is trying to adopt designs and models of helmets that are comfortable for two-wheeler riders. Passing final Motor Vehicle (Amendement) Bill 2016 under which not wearing a helmet can even lead to suspension of license.
  3. Two-wheeler helmet market growth is anticipated in Indian market for Studds Accessories and other organized players due to rising awareness among consumers for safety coupled with introduction of advanced safety features in two-wheeler helmets. Moreover, increase in sales of luxury or premium two-wheeler vehicles, rising per capita income, increasing population, growth automobile sector.

Thus based on above factors ,premium product launch, new production unit to be set up and anticipated CAGR growth of 25% in Indian Helmet Market through 2022 we strongly recommend “BUY” call for Studds Accessories Ltd.




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