Studds Accessories Limited Unlisted Shares

Annual Report Summary

Studds Accessories Limited Annual Report 2023-24 Summary:

Corporate Overview

• About Us: Studds Accessories Limited is a leading Indian manufacturer of helmets and motorcycle accessories, with over four decades of experience. They are known for excellence and have earned the trust of customers worldwide. They produce over 7 million helmets and more than 1 million motorcycle accessories annually.
• Mission: The company aims to become the top helmet provider globally, prioritizing safety, innovation, and quality to fulfill the dreams of riders.
• At a Glance: The company sold over 7 million helmets in FY24, exports to 70+ countries, holds approximately 25.66% market share in India, and acquired 130+ new domestic and export customers.

Chairman's Message:

• The Chairman, Madhu Bhushan Khurana, discusses the dominance of local players in the domestic helmet market and the growing impact of international brands in niche segments. Regulatory changes enforcing stringent safety standards and consumer awareness drive consolidation, competition, and higher product quality.
• The company's strategy focuses on diversification, quality, customer engagement, distribution network strengthening, and sustainability to maintain market leadership.
• The Chairman emphasizes the importance of enforcing helmet laws to improve rider safety, supporting these efforts through collaboration with government bodies, product development, and road safety campaigns.

Managing Director's Message:

• The Managing Director, Sidhartha Bhushan Khurana, reports a successful financial year (2023-24), attributing it to innovation, quality, comfort, and customer satisfaction. R&D has yielded advanced helmet designs with enhanced safety, comfort, and durability.
• The company has state-of-the-art development and testing labs.
• Studds is optimistic about international market growth, leveraging the China + 1 strategy and expanding dual brands with local distributors and compliant products.
• Over the next 2-3 years, the Americas have emerged as pivotal markets for our growth strategy, and the company is strategically positioned to capitalize on these opportunities.

Business Model:

• The business model encompasses design, raw material procurement, manufacturing, quality control, packaging, distribution, after-sales service, and customer service.
• The company aims to provide a safe riding experience with superior-quality helmets. Total income reached 5,358.38 million, PAT reached 572.27 million, with a production volume of 7+ million. CSR initiatives are taken towards education, environment, healthcare, and sanitation.

Financial Performance:

• Revenue increased from Rs. 4,991.69 million in FY23 to Rs. 5,290.23 million in FY24. EBITDA increased from Rs. 674.74 million to Rs. 970.08 million. Net worth increased from Rs. 3,379.65 million to Rs. 3,874.05 million.

Advancing Customer-Centric Innovations:

• Studds prioritizes innovation, investing in R&D to create new products and technologies exceeding customer needs, focusing on cutting-edge technology and quality.

Opportunity and Growth Prospects:

• The rising popularity of adventure sports like biking and the integration of the latest technology into helmets contribute to industry growth. The government's "Make in India" initiative is also elevating demand and the e-commerce offers margin expansion.

Branding and Marketing:

• Studds' marketing focuses on innovation, quality, and customer satisfaction, using various platforms for product showcasing and community engagement.

New Launches:

• The company launched new helmets like GTJ, BIONIC ADULT & KIDS, THUNDER, RAIDER, THUNDER CR, and VOGUE ECO.

Cultivating an Empowering Work Environment:

• Studds prioritizes an inspiring and empowering work environment with collaboration and mutual support for employee growth, offering training and development programs. The company's workforce includes 3000+ people and they are imparting training to 20 numbers.

Building Stronger Connections:

• The company operates sustainably, supporting local communities and initiatives in education, healthcare, and environmental maintenance.

Beyond Business: Our CSR Efforts:

• Studds promotes community growth through education (scholarships), healthcare (special therapy for children, medical assistance for adults), and environmental maintenance (supporting parks, rainwater harvesting). Studds also contributes to the PM Fund.

Awards and Accolades:

• The company has received several awards, including the Accessories Award 2013-2014, Commendable Export performance 2007-2008, Certificate of Excellence 2018-2019, 3.0 Technology Excellence Awards - Manufacturing Edition 2024 - Delhi and several awards by Bureau of Indian Standards in the year 2022.

Management Discussion and Analysis (MDA):

• The global economy has shown resilience, while facing macroeconomic challenges. In 2024, Europe's economic growth is expected to rebound. Asia's economy shows a divergence in growth prospects.
• India's GDP grew 8.2% in FY24. The two-wheeler industry is positively impacted and the helmet industry benefits from stricter safety regulations. The company aims to capitalise on the growth of domestic and international markets, adapting strategies for success.
• Studds understands its responsibility toward the environment and society.
• Risk management is a key part of its operation.

Board's Report:

• The Board recommends a dividend of Rs. 4 per equity share. Performance highlights include revenue from operations of Rs. 5,290.23 million and a profit after tax of Rs. 572.27 million.
• The company’s auditors’ reports do not contain any qualifications, reservations, adverse remarks or disclaimers.
• The Share Capital of the Company as on date is Rs. 9,83,83,500/-. The company has one wholly owned subsidiary and has been liquidated with effect from September 19, 2023.
• The Board has complied with the requirements of Section 134(3)(c) read with section 134(5) of the Companies Act, 2013,
• Ratings were awarded by CARE Ratings Limited on February 12, 2024 and reaffirmed previous ratings.

Key Financial Notes (From Consolidated Financial Statements):

• Auditor's report mentions some reliance on unaudited data from liquidated subsidiary company
• Total equity is Rs. 3,874.05 million
• A list of individuals that are KMP are noted, all key compensation is transparently presented.
• Detailed summaries of assets, liabilities, debts, and cash flows, and their relation to the performance of company goals are included.
• Detailed disclosure regarding all related party transactions, accounting policies, and management outlook are included.
• Certain directors are to retire by rotation, but are available for reappointment