Studds FY26: Premiumisation and exports reshape a helmet leader

Studds Accessories Limited closed FY26 with a steady top line and a sharper improvement in profitability, helped by a richer product mix and higher export contribution. On a consolidated basis, revenue from operations rose 8.6 percent year on year to INR 634.2 crore. EBITDA increased 16.4 percent to INR 122.2 crore, with EBITDA margin expanding to 19.3 percent. Profit after tax grew 18.7 percent to INR 82.7 crore, taking PAT margin to 13.0 percent.

The headline is not only growth. It is mix. Management highlighted that while Studds remains the large-volume backbone, SMK and private labels are becoming the key drivers of ASP improvement and value creation. The investor presentation shows this shift clearly in the revenue mix, with SMK and private labels gaining share versus FY25.

Q4FY26 also reflected the trend. Revenue grew 11.9 percent year on year to INR 167.5 crore. Export contribution in the quarter increased to 23.1 percent, up from 17.1 percent in Q4FY25. Margins stayed stable, with gross margin at 59.6 percent and EBITDA margin at 18.7 percent.

FY26 performance: higher margins built on mix and execution

Over FY23 to FY26, the company reported consistent improvement across gross margin, EBITDA margin, and PAT margin. Gross margin rose to 59.7 percent in FY26 from 56.2 percent in FY25 and 47.6 percent in FY23. EBITDA margin moved to 19.3 percent in FY26, up from 18.0 percent in FY25.

In the earnings call, management attributed the margin expansion to two broad reasons. First, FY23 had elevated input and freight costs, including a shipping crisis, which depressed margins. Second, over the last two years, the company has seen an improving product mix and export contribution, supporting gross margin even without significant raw material deflation.

The Q4 bridge also shows the impact. Exports as a share of quarterly revenue rose to 23.1 percent in Q4FY26, and management said exports are largely driven by the premium SMK portfolio. This matters because management indicated a ballpark EBITDA margin gap of over 10 percentage points between Studds and SMK, illustrating why premiumisation is strategically important.

Revenue mix: SMK and exports push the portfolio upward

Studds continues to be the dominant brand, but FY26 shows a clear rise in premium categories. The FY26 product revenue mix in the investor presentation was 74.1 percent Studds helmets, 15.7 percent SMK helmets, 3.1 percent private labels, and 7.0 percent other accessories.

The quarterly mix shift was sharper. In Q4FY26, Studds helmets reduced to 70.7 percent of product revenue, while SMK increased to 19.2 percent and private labels to 3.7 percent. This change aligns with management commentary that SMK and private labels will be primary drivers of ASP enhancement.

Geography also tilted more toward exports. In the investor deck, India represented 79.9 percent of FY26 revenue, while Europe increased to 7.5 percent and Asia excluding India to 5.9 percent. In the earnings call, management said exports were about 20 percent of total revenues in FY26 and are expected to rise further.

The company also disclosed an ASP datapoint for Q4. Management said blended ASP across domestic and exports was INR 815 in Q4FY26 versus INR 752 in Q3FY26. They also shared SMK ASP improvement on a full-year basis from INR 2,359 in FY25 to INR 2,552 in FY26.

Capacity and global distribution: preparing for the next leg

Capacity expansion is one of the most operationally important projects underway. The company indicated an existing capacity of 9.5 million helmets in FY26 and plans to expand capacity in phases. Phase I adds 1.5 million helmets per annum and is expected to commence operations by Q2FY27. A further 1.5 million addition is planned over the next 15 to 18 months. Post these additions, the company expects total installed capacity to rise by about 30 percent over FY26 levels to 12.5 million helmets per annum.

Management also explained that production capacity is flexible depending on the product mix, such as solid colour versus graphic helmets. It also highlighted the ability to shift production between Studds and SMK depending on demand.

The second major operating lever is Europe. The company is incorporating a subsidiary in Italy and setting up a warehousing and distribution model through a third-party logistics provider. Management stated that operations are expected to start mid Q2FY27, initially stocking 10,000 to 15,000 units, which they framed as about three months of inventory coverage.

In the call, management explained why Italy was chosen over Spain. Spain already has a strong distributor and the distributor committed to holding more inventory. Italy was being served indirectly and volumes were small despite being a large European market, so the company chose Italy to pursue a dealer-direct strategy without channel conflict.

Costs, pricing, and brand investment: the near-term watchlist

Raw material inflation is the key near-term risk discussed. Management said prices have been witnessing an upward trend since March. The company implemented calibrated price hikes averaging 8 to 9 percent from 1 April 2026 across the portfolio and distribution channels, domestically and internationally. However, management also stated that if raw material prices remain at elevated levels through the full year, the current hike may not fully offset the cost increase.

They described their approach as staged to avoid a scenario where prices would later need to be reduced if costs fall, noting that the company has never reduced prices. In response to analyst queries, management suggested that another 2 to 2.5 percent price increase could be needed if current cost levels persist.

Brand building is also being scaled up. Management stated that advertising and marketing spend in FY26 was about INR 23 crore and the budget for FY27 is INR 30 crore. The company is also investing in global brand positioning via motorsport participation. It participated in the Moto4 Latin America Cup hosted alongside MotoGP in Brazil through SMK and outlined a pathway toward MotoGP in calendar year 2028.

Beyond helmets, product pipeline is expanding. Management said the company launched 5 new products in FY26, designed more than 50 graphics, and plans to launch another 6 products in FY27. It is also in advanced prototype development for riding jackets and an external Bluetooth communication system for helmets, with commercial sales expected from H2FY27.

Takeaways

FY26 for Studds was a year of steady revenue growth but stronger profit growth, supported by premiumisation, exports, and operating discipline. The next phase is built around three execution tests: commissioning capacity expansion in Q2FY27, scaling the Europe hub in Italy, and navigating volatile raw material prices without losing demand momentum.

Management guided for FY27 revenue growth of around 17 to 18 percent with EBITDA margins broadly similar to FY26. If mix continues to shift toward SMK and exports, and incremental capacity comes online on schedule, the company’s premiumisation-led strategy has a clearer pathway to sustaining margin strength while expanding internationally.