Antique initiates with 'Buy' on Studds Accessories; sees 40% stock upside

Antique assigned a target price of ₹750 per share for Studds Accessories, implying an upside of about 40 per cent from the current market price

Antique Stock Broking initiated coverage on Studds Accessories Ltd. with a 'Buy' recommendation, citing its transition from a volume-led manufacturer to a branded, premium consumption compounder.

 

The brokerage assigned a target price of ₹750 per share, implying an upside of about 40 per cent from the current market price.

 

Studds Accessories, with a blended installed capacity of around 9 million units and a domestic market share of nearly 25 per cent, is well placed to benefit from structural industry tailwinds such as premiumisation, regulatory support, export scalability and improving capital efficiency, Antique said. These factors position the company as a high-quality compounder within the auto ancillary and branded consumption space.

 

 

The brokerage noted that the company's growth is anchored in its premiumisation strategy, led by the SMK brand, which targets aspirational riders in India and the mid-market segment in Europe.   ALSO READ | Titan hits all-time high on posting Q3 update; here's what analysts suggest 

The share of value-added products in the sales mix is expected to rise to 20 per cent by financial year 2027-28 (FY28) from 14 per cent in FY25, driving an estimated Ebitda compound annual growth rate of 16 per cent over FY24-25 to FY27-28. Return on capital employed is also seen improving from 18.7 per cent in FY24-25 to around 21.4 per cent by FY27-28, Antique said. 

 

The brokerage highlighted that disciplined capital allocation remains a key pillar of Studds' strategy. The company is expected to incur capital expenditure of around ₹100 crore in India and about €2 million in Europe over FY26-27 to FY28-29, largely towards capacity expansion, global distribution and new product development. While sales and marketing spend is projected to increase from about 2.5 per cent to nearly 5 per cent of revenue, higher average selling prices are likely to support Ebitda margins.

 

Studds is also expanding capacity by 1.5 million units in two phases, taking total installed capacity to 10.5 million units by FY27-28. The first phase is expected to begin ramping up in the second half of FY26-27, providing volume visibility without putting pressure on the balance sheet.  ALSO READ | Brokerages bullish on Godrej Consumer post Q3 biz update; here's why 

The brokerage said the shift in Indian consumer behaviour towards aspirational and safety-led consumption is structural rather than cyclical, warranting a higher valuation multiple. At the current market price, the stock trades at around 18 times estimated earnings for FY27-28, which Antique believes undervalues its growth visibility, improving product mix and rising return profile. 

 

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