Studds Accessories Limited Unlisted Shares

About Studds Accessories

a) Studds Accessories which has started its journey in 1972 from manufacturing first helmet in a garage is today manufacturing 7 million helmets and motorcycle luggage every year. Studds Accessories Limited has today grown to become the largest two wheeler helmet manufacturer in the world.

UNIQUE- Their laboratory is the only one in the industry (in India) to be certified by European Safety Agency, and Safety – They use one of the best technologies in the world to produce certified products.
In FY19-20, they have manufactured 66 Lakhs helmets up from 58 Lakhs last year.

b) Headquartered in Faridabad, the Company has four state-of-the-art facilities manufacturing an extensive array of over 50 products. Backed by a rich legacy, a strong product portfolio and a robust dealer network, the Company has more than 26% market share in India and offers products to more than 40 countries across the globe.

c) The company has 4 business verticals.
1. Helmets
2. Motorcycle Accessories
3. Face Shields and Face Masks.
4. Bicycle Helmets.

d) As on 31st March 2020, Studds Accessories has a network of 385 dealers spread across the globe and 7 EBO’s in India. The company has 2053 Number of employees.

Presence of the Company

The company has a presence in almost 40 countries in the world.

Competitiveness

a) Innovation- 16 New Products launches in the last 3 years.
b) Excellence- 21 No. of quality/safety tests done in-house (per helmet as per ECE 22.05 standard).
c) Adaptability- 7 Different sizes are available in the helmet.
d) Presence- Over 385 Active dealer network across India as on 31st March 2020 across more than 40 countries.

Look and Feel of the Products of the Company

a) Full-face helmet and b) Flip-up full-face helmets

c) Flip-off full-face helmets and

d) Open Face Helmets

e) Sporting helmets and f) Industrial Helmets

Revenue Model

(a) The company sells a helmet in the range of Rs.825 to 2165 under the brand name Studds having a market share of 25% as of FY18.
(b) The company sells a helmet in the range of Rs.2300 to 9800 under the brand name SMK having a market share of 27.79% as of FY18.
(c) Apart from selling a helmet the company also in the business of Motorcycle Accessories like Jacket, Gloves, Glass, etc.
(d) The 90% of the Revenue comes from Helmet division and 10% comes from Motorcycle Accessories.
(e) The 92.3% of the business comes from the Domestic Market and rest 7.97% comes from Export.

Latest Interaction with Management- 16.05.2020

How Helmets are Manufactured in Studds Factory

FY19-20 Analysis:

Business Highlights

1. Despite challenges in the market Studds have performed well and the top line grew by 10.85%. Besides, growth in the top line, the operating EBIDTA grew at 41.16% and the PAT grew by 81.05% from the preceding year.

2. This year Studds has made significant investments to develop a world-class R&D facility, backward integration by manufacturing EPSL in the plant, with an endeavor to improve the quality of the products and meet stringent safety standards.
3. During the year, the company has stepped up efforts to improve relations with its dealers and distributors and it helped to significantly increase its market share. As of 31st March 2020, the network of 385 dealers is spread across the globe and 7 EBO’s in India.
4. This year the company has launched new products i.e. Titan Fiber, Titan Carbon, Sub Urban. They are planning to further bolster the segment with the launch of riding gear, jackets, armours, elbow guards, knee guards, and shoes.
5. This year company has sold 66.5 Lakhs (Domestic + Global) and globally has a Domestic market share in Two Wheelers helmets as 25.66%.

Promoters And Management:

(i) Mr. Madhu Bhushan Khurana is the Chairman and Managing Director of the Company. He holds a bachelor’s degree in engineering (aeronautical) from Panjab University. Madhu Bhushan Khurana has been on Board since our Company’s incorporation. Prior to incorporating Company, he was an entrepreneur and had commenced the business of manufacturing motorcycle helmets. He has over 35 years of experience in the field of business administration, finances, strategies, and manufacturing. (ii) Mr. Sidhartha Bhushan Khurana is the Managing Director of the Company. He holds a bachelor’s degree in engineering (aeronautical) from Panjab University. He has been on  Board since 1998. He has more than 19 years of experience in the field of business administration, finance, strategy, and manufacturing.

Financials of Studds Accessories Limited Unlisted Shares:

Assets and Liabilities (all figures in Million)
Year	Asset	Liabilities	Net Worth	Book Value	Debt	Debt/Equity	RONW
FY16	1,234.28	598.93	635.35	581	24.3	0.04	39%
FY17	1,416.99	546.74	870.25	796	24.75	0.03	27%
FY18	2,228.33	1,041.45	1,186.88	1086	3.51	0	28%
FY19	3,022.81	1,442.91	1,579.90	80.30	390	0.247	26%
FY20	3478.56	1318.31	2160.87	110.20	277	0.12	34%

Profit n Loss Key Parameters (all figures in Million)
Year	Revenue	PAT	EBITDA Margins	Profit Margins	Outstanding Shares	EPS
FY16	2,930.26	245.59	13.40%	8.0%	1.093	12.48
FY17	3,111.33	236.01	11.90%	8.0%	1.093	11.99
FY18	3,417.89	328.81	16.80%	10.0%	1.093	16.71
FY19	3,972.53	404.86	18.53%	10.2%	19.676	20.58
FY20	4369.46	745.92	23.72%	17%	19.676	37

Key Salient Points of FY18-19 1. The Company has shown 16% Revenue Growth in FY18-19 as compared to last year. 2. The Company has shown 23% PAT Growth in FY18-19 as compared to last year. 3. The Company has almost debt Free. D/E is 0.247 4. The Company has Excellent Return Ratios ROE and ROCE in the last 3 years. Key Salient Points of FY19-20 1. Studds has clocked the revenue of 431 Crores in FY19-20 up by 10.8% as compared to last year. 2. Studds has clocked an EBITDA of 103 Crores in FY19-20 up by 41% as compared to last year. 3. Studds has clocked the PAT of 74 Crores in FY19-20 up by 84% as compared to last year. 4. EPS for the year 2019-20 stands at 37. 5. The total debt on books is 27 Crores and Net-worth of 216 Crores. So, D/E is 0.12. 6. RONW of FY19-20 is 34%.

Year	ROE	ROCE
2016	39%	52%
2017	27%	37%
2018	28%	32%
2019	26%	29%
2020	34%	40%

Valuation: Currently, it is available at Rs. 1500 per share in the unlisted market. Total equity in the market is 1.9676 Crores. Mcap = 2900 Crores. P/E = 40x Note: i) The Company was having total outstanding Shares of 1,093,150 with FV=10 as on March FY18. (ii) Then on July 07 2018, the company had split the FV from 10 to 5 and accordingly the number of shares increased to 2186300 Shares. (iii) Then on July 16, 2018, the company has issued bonus shares in the ratio 1:8 and accordingly the number of shares increased to 19,676,700 Shares before the issue. (iv) As of 31.03.2019, the company has 19,676,700 outstanding shares. (v) As of 31.03.2020, the company has 19,676,700 outstanding shares. Studds Annual Report 2020 Studds Annual Report 2019 Studds Annual Report 2018 Research Report-01.01.2019 Research Report- 07.10.2019 Graphical Representation of Studds Accessories Limited Unlisted Shares.