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Studds Accessories Limited held an earnings conference call to discuss its Q4 and FY26 financial results. Management highlighted significant growth in premium segments like SMK and private labels, alongside steady performance in the core STUDDS brand. Capacity expansion is on track, and the company is establishing a European subsidiary in Italy for warehousing and distribution. Planned advertising and marketing spend is set to increase in FY27 to boost brand visibility and global development. The company anticipates robust revenue growth of 17-18% for the next fiscal year, with stable EBITDA margins.
Consolidated revenue for Q4 FY26 was INR 167.5 Cr, up 11.9% YoY, with PAT at INR 21.1 Cr, a 6.1% increase. For the full year FY26, revenue grew 8.6% YoY to INR 634.2 Cr, and PAT rose 18.7% YoY to INR 82.7 Cr. Management expressed confidence in long-term growth driven by premiumization, export expansion, and a diversified product portfolio, aiming to build STUDDS into a globally respected rider safety company. The Board has approved an ESOP plan and proposed a dividend of INR 3 per equity share.
Key discussion points included the fungibility of manufacturing capacity, with potential for higher output based on product mix. The new Italian subsidiary is expected to commence operations by mid-Q2, initially stocking 10,000-15,000 units. Advertising spend for FY27 is budgeted at INR 30 Cr. ASP for Q4 was INR 815, an increase from Q3's INR 752. Gross margins remained stable in the recent quarter despite rising raw material prices, with management confident that implemented price hikes of 8-9% will largely offset costs over the full year, anticipating margin expansion as material prices stabilize. Margin differential between STUDDS and SMK was noted at over 10% EBITDA, with export and domestic margins being similar due to SMK's significant export contribution. Operating leverage is expected to kick in as turnover grows, with exports projected to reach 30% of total revenues in 2-3 years. The company foresees a significant structural shift from unorganized to organized players in the Indian helmet market. Seasonality typically sees 45% of volumes in the first half and 55% in the second half.
The company plans to participate in various global racing events, including aiming for MotoGP by calendar year 2028. Export growth initiatives are focused on markets like Colombia, Mexico, USA, Italy, Turkey, Sri Lanka, and Indonesia, with plans to enter dealer-direct models in key regions. New distributors have been appointed in Mexico and Turkey. Inventory days have increased to 91 days, attributed to a new Indian warehouse and higher US sales, with a comfortable range of 85-90 days expected going forward. The company anticipates that the unorganized market may face challenges due to price pressures, potentially leading to consolidation. Demand remains strong both internationally and domestically, with price increases being well-accepted. Domestic distribution expansion focuses on penetrating existing markets with current distributors rather than adding a large number of new ones. Price increases have been implemented across domestic and international markets.