Studds Accessories eyes 9-10% revenue growth on export push and regulatory tailwinds: MD Khurana

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Studds Accessories is anticipating a topline growth of 9-10% for the full year, driven by a multi-pronged strategy focusing on export expansion, leveraging regulatory tailwinds, and tapping into the under-penetrated domestic market. In an interview with CNBC TV18, Sidhartha Bhushan Khurana, MD, Studds Accessories, confirmed that margins are expected to remain sustainable at current levels.

Detailing the company's recent performance, Khurana noted that the first half of the fiscal year saw robust growth. "If I compare H1 on a year-to-year basis, on the revenue side, there is a growth of about 6.5%. And on the PAT (profit after tax) side, there is a growth of almost 23%," he stated, highlighting the significant margin expansion achieved during the period.

The company sees a substantial long-term opportunity within India, where helmet penetration remains significantly low. Khurana pointed out that the current rate in India is approximately 0.6 helmets per biker, which is less than half the global average of 1.52. This gap presents a considerable runway for growth as safety awareness and compliance increase.

A key pillar of Studds' growth strategy is its burgeoning export business, which offers significantly higher realisations. "Our ASP (average selling price) on the domestic side is about close to ₹730, whereas on the export is close to ₹1600," Khurana explained. This price difference makes exports a crucial driver for both revenue growth and margin expansion. He noted that while the global helmet market has grown by about 6.5% over the last five years, exports from India have surged at a compound rate of 21%.

To further capitalise on this trend, Studds is strengthening its international presence. The company is currently targeting large markets such as Colombia, Mexico, Indonesia, the Philippines, and Spain. "As a part of the strategy, we would be opening a warehouse and a subsidiary in Spain this year," Khurana revealed. This move is aimed at drastically reducing the time-to-market in Europe, which currently stands at around 60 days from order placement, thereby enabling the company to gain market share more effectively.

Furthermore, Studds' partnership with sports retailer Decathlon is set to commence production in the final quarter of the current financial year. While the initial supplies will be for the Indian domestic market, the plan is to eventually export to Decathlon's various international markets.

On the regulatory front, Khurana sees a potential major catalyst for the industry. While a law mandating one helmet with every new two-wheeler is already implemented in nine states, a draft regulation proposes making two helmets compulsory with each purchase to account for the pillion rider. "Sooner or later we think it's going to come into effect and that's going to have a consequence on the industry as such. The industry is going to grow because you're giving two helmets in the same house," he concluded.