1

Course Title: Corporate Treasury and

Course Code: FINM687 Investors Relations

Course Instructor: Mr.

Sushant Gupta Section: Q1E22

Academic Task No.: 2 Academic Task Title: Assignment

Date of Allotment: 29/11/2022 Date of Submission: 12/12/2022

Student Roll No: RQ1E22A03 Student Registration No: 12101756

Evaluation Parameters:

Learning Outcomes: To understand pre and post IPO working

Declaration:

I declare that this Assignment is my individual work. I have not copied it from any other
student’s work or from any other source except where due acknowledgement is made
explicitly in the text, nor has any part been written form by any other person.
Student’s Signature: Jayashree Pilli
Evaluator’s comments (For Instructor’s use only)

General Suggestions for Improvement Best part of assignment

Observations

Evaluator’s Signature and Date:

Marks Obtained: ______ Max.Marks: ____
 2

STUDDS ACCESSORIES

STUDDS Accessories Limited, established in 1983, is the top producer of

helmets and motorbike accessories in India and the rest of the world. In
addition to having a presence in more than 50 countries throughout the
world, including Europe, Asia, Latin America, and the Middle East,
STUDDS offers a wide variety of two-wheeler helmets and accessories. Our
emphasis on style, design, quality, and safety, in our opinion, positions us as
a lifestyle option for our clients. STUDDS is the world largest manufacturer
of helmets and motorcycle accessories in India with presence in more than
50 countries. STUDDS has set up Asia largest helmet manufacturing unit in
Haryana, India. The company has four business verticals:
1. Helmets
2. Motorcycle accessories
3. Bicycle helmets
4. Face shields, face mask

The new government regulations requiring that only BIS-certified helmets be

manufactured and marketed in India are anticipated to be the most
advantageous for Studds. Due to strict traffic regulations, an increase in the
market share of organised players, and a rise in the sales of high-end
automobiles, the demand for helmets is anticipated to expand at a double-digit
growth rate in the upcoming years. Due to anticipated high demand, the
company committed 200 crores under the "Make in India" programme of the
Indian government to double its current manufacturing capacity from 7 million
to 14 million units. The manufacturing facilities have paint, moulding, visor
coating, packaging, and warehousing units and are fully automated. The largest
manufacturing facilities in Asia are those of Studds. Studds has partnered with
 3

Rajasthan Royals as their associate sponsor for IPL 2021 and 2022 season.
Studds has a strong distribution network and chain of exclusive brand outlets
across India. Presently, Studds has 26% market share in India aiming to
increase its market share to 40% in the coming three years.

IPO OF STUDDS ACCESSORIES

As on 31-March-2022, the total outstanding shares of the Studds

Accessories were  1,96,76,700 shares of face value of Rs 5 each and
promoters own more than 69% of the total shareholding. At Rs 1,175 share
price in the unlisted market, the total market cap of the company was approx
Rs 2,300 crores and P/E of 81x (1175/14.55).

BUSSINESS MODEL OF STUDDS ACCESSORIES

Studds is a leading manufacturer and exporter of automotive and bicycle helmets,

motorcycle accessories, and face shields.  The company sold 59 lacs helmets
during FY 2022. The company has 4 manufacturing plants, all of them located in
Faridabad, Haryana. Besides helmets, Studds also manufactures two-wheeler
accessories like jackets, side boxes, top boxes, gloves, rain suits and goggles. 

The company exports around 20% of its turnover to around 40 countries in the
Middle East, Europe, North America and Latin America.The company retails its
helmets under 2 brands: STUDDS and SMK. STUDDS is positioned towards the
domestic market while SMK is an export-focused premium brand.
 4

The Process of Business model includes:

1. Research & development

2. Manufacturing
3. Corporate Governance
4. Branding & Marketing
5. Distributor & Supply chain
6. Stakeholders & Customers
7. Investors & Community
8. Government & Shareholders
9. Employees
10.Suppliers & trade partners

 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 on FY18.
 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 on FY18.
 Apart from selling a helmet the company also in the business of Motorcycle
Accessories like Jacket, Gloves, Glass etc.
 The 90% of the Revenue comes from Helmet division and 10% comes from
Motorcycle Accessories.
 The 92.3% of the business comes from the Domestic Market and rest 7.97%
comes from Export
5
 6

PEER COMPARISON

Company Market Profitability ROCE(%) ROE(%) D/E P/E P/B Book

Cap( in Margin (%) Ratio Ratio Ratio Value
Crores per
) share

STUDDS 2154.60 6.12% 11.96% 9.53% 0.14 75.26 6.93 158.00

ACCESSORIES

SAR AUTO 300.00 10.54% 8.07% 7.45% 0.35 200.42 14.97 31.73
PRODUCTS
LTD

HINDUSTAN 39.00 5.88% 30.64% 24.61% 0.43 9.73 2.39 99.83

HARDY LTD

These are some peers of Studds Accessories : SAR Auto Products Limited. And
Hindustan Hardy Limited. Studds is holding largestin market in india.

The company is also earning moderate Return on asset then compared to

peer it is little less as all other are from long time in market. So, seeing the
time period it is performing well.
 7

SWOT ANALYSIS OF STUDS ACCESSORIES

STRENGTHS

 Growing Preference for Customizations in Two Wheelers With Addition of

Various Accessories
 Innovation & Advancement
 Growing Market

WEAKNESS

 Quality of Two Wheelers Accessories

 Intensely competitive industry
 Similar design of all models with similar features
 Lost market share

OPPORTUNITES

 Growing Demand for Two Wheelers For Off-Road Travel Will Ultimately
Increase Two Wheelers Accessories Demand
 Increasing Use of Sports Two Wheeler in Racing Games

THREATS

 Increasing Automotive Industry

 High Disposable Income of Developed Countries
 Government Support for the Distribution of Two Wheelers Accessories
 8

FINANCIAL METRICS OF STUDDS ACCESSORIES

Values
Inventory Turnover ratio 1.07
Profit margin 6.02%
ROE 9.53%
ROA 6.44%
EBITDA 12.87

The  financial information of STUDDS ACCESSORIES LTD. for the financial

year ending on 31 March, 2022.

 Revenue / turnover of STUDDS ACCESSORIES LTD. is INR 100 cr - 500

cr
 Net worth of the company has increased by 34.19 %
 EBITDA of the company has increased by 12.87 %
 Total assets of the company has increased by 24.88 %
 Liabilities of the company has increased by 30.75 %
 9

MARKET CONDITION OF STUDDS ACESSORIES

Studds Accessories Ltd in FY 2020 has sold around 7.2 Million Helmets out of
which 5 lacs helmets were exported and remaining were sold in domestic market.
The demand for helmets has increased in domestic market and so the company has
started off with its new plant at Faridabad with installed capacity of 6 million
helmet p.a With this new plant the total production capacity of Studds stands at
12.5 million bike helmets and 1.5 million bicycle helmets p.a.

The largest helmet producer in the world, Studds, is expanding quickly to increase
its market share from 26% to 40% in the next three years as a result of tighter
regulations and rising organised player market share. Studds has a 14 million
helmet production capacity.

Averaging 10% of net income, Studds consistently distributes dividends and

upholds outstanding corporate governance standards.

The company Studds is largely debt-free and keeps a negative working capital
cycle.

Through dealerships and exclusive brand stores, Studds is growing its retail
presence, with an eye toward doubling its export presence over the next three
years.

Studds: Helmets priced from INR 825 to INR 2165. It has a market share of around
25.66%. Mainly, targeted for African and Asian mass commuter segment.
 10

SMK: These are premium helmets mostly for biking enthusiasts. Priced between
INR 2300 to INR 9800. It has a market share of 27.79%, in the premium segment.
This brand is targeting European countries, Latin America and Asian countries