IPO Note : Studds Accessories Ltd by Choice Broking Ltd
Salient features of the IPO:
* Studds Accessories Ltd. (SAL) incorporated in 1983, it is India’s largest two-wheeler helmet manufacturer by revenue in FY24 and the world’s largest by volume in Calendar Year 2024. With nearly five decades of experience, the company operates three manufacturing facilities with a combined annualized capacity of 9.04mn units. Its flagship brand Studds held a strong domestic market share of 27.3% by volume and 25.5% by value in FY24.
* The company designs, manufactures, markets, and sells two-wheeler helmets under the ‘Studds’ and ‘SMK’ brands, and also offers a range of two-wheeler accessories - including luggage, gloves, helmet locks, rain suits, riding jackets, and eyewear - under the ‘Studds’ brand. SAL has a strong domestic and international presence, with products sold across India and exported to more than 70 countries spanning the Americas, Europe, Asia (excluding India), and other regions.
* The company also manufactures helmets for Jay Squared LLC (sold under the “Daytona” brand in the U.S.) and for O’Neal, supplying their branded helmets to markets in Europe, the United States, and Australia.
* This public issue is entirely OFS (Rs. 433.69 - 455.49cr), thus the company will not receive any proceeds from this public issue.
Key competitive strengths:
* Largest domestic player of two-wheeler helmets
* Wide design and product catalogue across price points catering to diverse consumer requirements
* Advanced manufacturing and D&D capabilities with vertically integrated operations
* Strong pan-India and global presence supported by an extensive and welldeveloped sales and distribution network and major quality accreditations
* Capital efficient and sustainable business model
* Experienced promoters and management team
Business strategy:
* Expand and strengthen production capacity & deepen vertical integration
* Strategically expand into new markets and geographies
* Increase offerings in the premium helmet segment
* Expand product portfolio
* Increase focus on domestic online sales channel
Risk and concerns:
* Dependence on two-wheeler demand - industry slowdown can directly impact revenue
* Exposure to raw material price volatility
* Seasonal demand patterns may cause uneven revenue across quarters
* Exposure to export market fluctuations, foreign exchange volatility, and changing trade policies
* Competition
Valuation Overview and IPO Rating:
SAL is India’s largest two-wheeler helmet manufacturer by revenue in FY24 and the world’s largest by volume in CY24. With nearly five decades of experience, the company operates three manufacturing facilities with a total annualized capacity of 9.04mn units. Its flagship brand Studds held a domestic market share of 27.3% by volume and 25.5% by value in FY2024, underscoring its leadership and strong brand equity. The company’s focus on safety, reliability, and quality has helped establish its brands - Studds and SMK - as trusted names among consumers, supported by innovation, adherence to global safety standards, and expansion into premium segments.
At a valuation of P/E multiple of 33.1x (FY25 EPS of Rs. 17.7) and an EV/Sales multiple of 3.8x, SAL appears fairly priced. Its dominant market position, strong brand recall, and growing presence across domestic and international markets, coupled with favorable industry tailwinds and consistent financial performance, position it well for sustainable growth. We therefore recommend a “SUBSCRIBE” rating
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SEBI Registration no.: INZ 000160131
