Greenfield capacity coming onstream, Italy subsidiary live, US profitable, Decathlon tie-up secured, Bluetooth helmets launching
Most investors who own two-wheelers in India own a Studds or SMK helmet — whether they know it or not. Studds Accessories is India’s largest helmet manufacturer, with 240 designs, 50 moulds and over 19,000 SKUs distributed across 360 distributor relationships, OEM channels and e-commerce platforms spanning 70 countries.
The stock has corrected 19% over six months — pulled down by near-term margin pressure from Middle East-related inflation and the FY27 capex cycle. Dhanki Securities initiates coverage with a BUY rating and a target price of Rs 565 — 32% upside from the current market price of Rs 428 — arguing that the correction has created a compelling entry point into a business with strong structural tailwinds, genuine global ambitions and a capacity expansion that will support growth through FY28 and beyond.
Two Brands, One Strategy
The Studds portfolio has a natural architecture. The ‘Studds’ brand serves the mass market — the vast majority of India’s 200 million-plus two-wheeler owners who need an affordable, reliable, BIS-certified helmet. The SMK brand occupies the premium space — targeting the growing cohort of riders who want performance-oriented, design-led helmets and are willing to pay for them. Together, these two brands span the full market — from the first-time helmet buyer to the enthusiast who follows MotoGP and wants racing-inspired gear.
The premiumisation strategy is running on both tracks simultaneously. Under the Studds brand, higher-priced offerings — positioned below SMK but meaningfully above the existing range — are being launched, targeting the aspirational upgrade buyer who is moving up from entry-level helmets. SMK’s premium positioning is being reinforced globally through racing-led branding — a strategy that works well internationally where motorsport association carries strong purchase influence. “STUDDS is driving premiumisation across both brands,” Dhanki notes — a revenue mix shift that will progressively improve realisations and margins as it scales.
Beyond Helmets
One of the more interesting strategic dimensions of the Studds story is the product extension beyond helmets. The company is diversifying into bicycle helmets — backed by a recent tie-up with Decathlon, which gives instant access to a premium retail network and a quality-conscious consumer base. Two-wheeler luggage, riding jackets, rain suits, gloves and apparel are being added. And Bluetooth communication devices — integrated helmet communication systems — are being launched, transforming what has historically been a safety product into a connected riding technology platform.
Each of these extensions reinforces the same brand equity that drives helmet sales, creates cross-sell opportunities within the existing distribution network and adds recurring revenue streams from accessories that have shorter replacement cycles than helmets. The private-label business — manufacturing for global brands Daytona and O’Neal — provides volume visibility and manufacturing scale benefits that support the branded business.
The Greenfield Capacity
The most immediate operational catalyst is the greenfield capacity expansion at Faridabad. The existing facility is near peak utilisation — a growth constraint that has been limiting revenue upside. Phase 1 of the new facility, with capacity of 1.5 million units, entails capex of Rs 1-1.1 billion and is expected to turn operational by mid-Q2FY27. Phase 2 — planned 15-18 months after Phase 1 — adds another 1.5 million units, taking total installed capacity to 12.5 million units.
“This will increase total installed capacity to 12.5mn units, creating sufficient headroom to meet demand requirements and sustaining healthy growth momentum,” Dhanki notes — and the timing of Phase 1 commissioning, as FY27 unfolds, means the capacity constraint on revenue is being removed within the current fiscal year. The FY28 growth acceleration that Dhanki projects is partly premised on this capacity being available and filling with demand from domestic and export channels.
Global Footprint — Italy Live, US Profitable
Studds’ international business is evolving rapidly from a traditional export model to a direct market presence. Export revenue has already risen to 20.1% of total in FY26 across 70+ countries. The US subsidiary has turned profitable — a significant milestone that validates the direct-market model. And a wholly-owned subsidiary in Italy has been set up to function as a warehousing and distribution hub for European markets, enabling a shift from distributor-dependent sales to a dealer-direct model that captures distributor margins and improves realisations.
“This shift to dealer-direct model will enable capturing of distributor margins and improving realisations,” Dhanki states — and the Italy hub is the infrastructure that makes this possible across Europe, which is one of the world’s largest premium helmet markets. Management targets approximately 25% of revenue from exports over the next two to three years — up from 20.1% today — with the Italy hub and the SMK racing-led global branding as the primary drivers.
The FY27 Earnings Dip
Dhanki’s estimates show a 14% EPS decline in FY27 before a 36% recovery in FY28 — and the reasons are specific and time-bound. Middle East crisis-related inflation is pressuring input costs in the near term. The greenfield capex cycle is adding depreciation before the revenue fully ramps. And the transition to direct market models in exports incurs setup costs before the margin benefit is realised.
“Near-term volatility in profitability anticipated due to Middle East crisis-led inflation; margin trajectory would improve meaningfully from FY28E, led by improving product mix and exports,” Dhanki notes. EBITDA is expected to fall from Rs 1,222 million in FY26 to Rs 1,098 million in FY27 before recovering to Rs 1,463 million in FY28. PAT follows a similar arc — Rs 827 million in FY26, Rs 710 million in FY27, Rs 966 million in FY28. Investors buying at current prices are effectively paying for FY28 earnings at 17.4x — a reasonable entry point for a business with this growth and margin recovery trajectory.
Scorecard
| Metric | Value |
|---|---|
| Current Market Price | Rs 428 |
| Target Price | Rs 565 |
| Upside | 32% |
| Rating | BUY (Initiation) |
| FY26 Revenue | Rs 6,342 million |
| FY28E Revenue | Rs 8,171 million |
| Revenue CAGR FY26-28E | 13.5% |
| FY28E EPS | Rs 24.5 |
| FY28E P/E | 17.4x |
| FY28E ROIC | 22.1% |
| New Capacity (Phase 1) | 1.5mn units by mid-Q2FY27 |
| Total Capacity Post Expansion | 12.5mn units |
| Export Revenue Share FY26 | 20.1% |
| Export Revenue Target | ~25% in 2-3 years |
| 6-Month Stock Decline | -19.2% |