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Key Highlights from Studds Accessories Annual Report of FY18-19 – 05.09.2019

1. The Company grew from being a relatively small-sized trading business to emerging as a corporate of considerable scale. They grew from 41 Cr in revenues in 2009-10 to 390 Cr in 2018-19. During this decade, the Company reported a compounded annual growth in revenues at a rate of 28.4%.

2. 5.89 million Helmets manufactured in the year 2018-19.

3. 39 countries of product presence. Studd Accessories is truly a multi-product, multi-location, and multi-market company. The Company today has three operational and one under construction in Faridabad, Haryana. Backed by a strong portfolio of more than 50 products and a strong dealer network, the two major brands of the Company STUDDS and SMK are synonymous to quality two-wheeler helmets.

4. From a macro perspective, the Indian two-wheeler industry was under pressure for a major part of FY19. The total two-wheeler sales for FY19 (from August 2018 to March 2019) stood at 2,11,81,390 units and recorded only a 4.86 percent growth over the previous year.

5. Factors such as an all-time high unemployment rate, a severely hit service industry, lack of liquidity due to the debacle in the non-banking financial company (NBFCs) sector, high insurance costs and rising fuel prices have hurt the demand sentiment. Despite volatilities, Studds did well in FY19 and achieved double-digit growth. For us, it was another year of commendable performance where we grew our top line by 19% and our bottom-line by ~28%.

6. One of the biggest achievements of the year was getting bicycle helmets to plant operational, With a production capacity 5 million helmets per year, it is likely to expand the revenue stream for the company. The plant became operational in the first quarter of FY20 and will company serve a large customer base across the globe.

7. Studds has a presence in almost all the continents, with a total dealer count of 373 as on 31st March 2019. The Company opened one new Exclusive Brand Outlets (EBOs) during the year at Dehradun and is in the process of opening 5 more EBO’s at Rohtak, Cochin, Mumbai, Bangalore, and Vijayawada. This helps the Company showcase a balanced mix of products to its customers and enhance the share of value-added ones. They are planning to open 10 more such exclusive stores across India by next year, across India.

8. They have started the production of EPS (Expandable Polystyrene) an in-house process, and it is now produced in their new plant. EPS is the most important safety aspect of the helmet. Previously, the production of this was outsourced. This enables them to take better control of the quality factor. It’s a big step towards quality improvement

9. In FY19, the different strategies adopted by the Company helped them to increase their adjusted revenue by 18.7% to 3890.40 million from 3277.26 million in FY18. They sold 5858208 helmets and 515943 motorcycle boxes during the year. Recorded a high EBITDA margin of 48% during the year under review. This happened due to the increased operational efficiency in their process. Their inclusive growth philosophy further helped them to record a PAT of 411.72 million in FY19 compared to 328.81 million in the previous financial year.

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