OK Play India — Q4 FY25 earnings call

Call held 23 Apr 2025

Management summary

OK Play India reported a mixed Q4 FY25, with total revenue at ₹58 crore, a 3% YoY decline, primarily due to a 25% YoY drop in the automotive segment. However, the toy segment demonstrated strong growth of 40% QoQ, reaching ₹28 crore. The company is actively diversifying revenue streams with new automotive partnerships and an upcoming commercial launch for its air filtration business, while also planning a ₹100 crore Phase 2 expansion for toys targeting exports.

Highlights

  • Toy segment revenue grew by approximately 40% QoQ to ₹28 crore in Q4 FY25, demonstrating strong momentum and increasing market share.

  • New partnerships for automotive components (Vestas, Indocool, Escorts) are expected to contribute meaningfully to revenues from FY26, aiding diversification.

  • The air filtration business, a joint venture with MANN+HUMMEL, is progressing with successful pilots and a planned commercial launch in the current year.

  • Phase 2 expansion for toys, with a planned investment of ₹100 crore, targets the lucrative export market and is expected to break ground in H2 FY26.

  • India's toy sector benefits from strong government support, rising exports, and favorable US tariffs on Chinese imports, creating a significant market opportunity.

Concerns

  • Total revenue declined modestly by 3% YoY to ₹58 crore in Q4 FY25.

  • Automotive components division witnessed a 25% YoY decline in revenue to ₹30 crore in Q4 FY25, aligning with broader commercial vehicle sector trends.

  • Teething issues were encountered during the ramp-up of Phase 1 toy capacity, preventing full optimum utilization of ₹14-15 crore/month, with current utilization at ₹9-10 crore/month.

Key financials

  1. Revenue ₹58 Cr -3%YoY
  2. Blended EBITDA Margin 20%
  3. Asset Turnover (Phase 1 Toys) 3.25×

What they filed

Q1 FY27: revenue up 11.2%, net profit down 86.2% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue38 33 57 41 39 +3%52 +58%66 +15%46 +11%
EBITDA8 7 10 6 5 −38%5 −29%9 −12%8 +48%
Net profit0 1 -3 1 -3 −1129%2 +119%4 +232%0 −86%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

Share of Revenue
₹58 Cr Total
  • Automotive Components ₹30 Cr 51.7%
  • Toy Segment ₹28 Cr 48.3%

Capital allocation

high confidence
  • Capex ₹100 Cr Largely equity, with potential for debt if needed
    • Phase 2 toy expansion, focusing on injection molded, battery operated, and role play products for export market ₹100 Cr
    The total planned investment for Phase 2 is about Rs. 100 crore.
  • Debt Debt disclosed
    But we will not be kind of getting into a situation where we have a substantial amount of debt sitting on our balance sheet. This is something that the management is also stressed upon. And if you see, in the past few quarters also we have reduced our debt quite a bit.

Guidance & targets

Revenue

  • Toy Segment Revenue Growth Revenue · Q1 FY25 · Medium confidence further grow
    we expect this quarter maybe to be very good because the schools and other organizations -- This quarter is expected to be good because our contracts, like I had mentioned in the earnings call previously as well, are now commercialized and we have started supplying. And we expect the numbers to come up, like we have seen numbers spike up in quarter four, we expect this to further grow in quarter one of FY '25.

    — Rishab Handa

  • Toy Segment Annual Revenue Revenue · FY26 · Medium confidence ₹200 crore
    So, the demand that you see right now, is that enough for you to reach your target of Rs. 200 crore from the toys business in FY '26, which you had mentioned in the last call? -> We should be doing that. I do not comment on specific numbers, but we should be doing that.

    — Rishab Handa

  • Long-term Overall Revenue Target Revenue · Long-term (implied) · Low confidence ₹1,000 crore
    But if we want to make it Rs. 1,000 crore business, we will not be able to do it if we just focus on the domestic market.

    — Rishab Handa

Profitability

  • Blended EBITDA Margin Profitability · Sustainable · High confidence 20-22%

    Previously 22-24% → 20-22%

    Ok. And the blended EBITDA you said you can expect around 22% to 24%, does that still hold true? Is that sustainable? -> Yes, the blended would be about 20% to 22%, yes.

    — Rishab Handa

Capex

  • Phase 2 Toy Expansion Investment Capex · By H2 FY26 · High confidence ₹100 crore
    The total planned investment for Phase 2 is about Rs. 100 crore. We also intend to benefit from the upcoming production linked incentive scheme and the toy sector policies announced in the Union Budget, which are expected to provide capital subsidies and rebates.

    — Rishab Handa

  • Phase 2 Toy Plant Setup Timeline Capex · From H2 FY26 onwards · High confidence 6-10 months
    And I think it should be taking about anywhere from 6 to 10 months to put the plant in place.

    — Rishab Handa

What to watch in Q1 FY26

Toy Segment Capacity Utilization

Coming quarters
Current ~65% (₹9-10 crore/month out of ₹14-15 crore/month)
Target Optimum capacity (₹14-15 crore/month)

Why it matters

Reaching optimum utilization is key to maximizing revenue and profitability from Phase 1 toy expansion.

we have already attained about Rs. 9 crore to Rs. 10 crore in quarter four. So we are pretty much on track and we expect reaching optimum capacity in the coming quarters.

Risks & concerns

  • Automotive segment underperformance

    medium

    Automotive components revenue declined 25% YoY in Q4 FY25 due to broader CV sector slowdown, but company is derisking with new partnerships.

    Management acknowledged

  • Toy capacity ramp-up teething issues

    low

    Phase 1 toy capacity of ₹14-15 crore/month is currently utilized at ₹9-10 crore/month due to teething issues, expected to normalize in coming quarters.

    Management acknowledged

Q&A highlights

5 direct, 1 evasive
Revenue bifurcation for Q4 FY25 and Q4 FY24 for toy and automotive segments. Direct
So, in Q4 we have done about Rs. 28 crore in toys and about Rs. 30 crore in the automotive segment. ... in Q4 of FY '24 we did Rs. 40 crore, and in FY '25 we did Rs. 30 crore, that's a decline of about 25%. And in the toy segment, in FY '24 we did Rs. 20 crore and in FY '25 we have done Rs. 28 crore, with an increase of about 40%.

Provides a clear breakdown of segment performance and highlights the contrasting trends between the toy and automotive divisions.

Asked by Dhiraj Kaswan

Optimum capacity utilization for toys and timeline to achieve it. Partial
We have a capacity of doing about Rs. 14 crore to Rs. 15 crore a month in toys. ... we have already attained about Rs. 9 crore to Rs. 10 crore in quarter four. So we are pretty much on track and we expect reaching optimum capacity in the coming quarters.

Indicates current underutilization of toy manufacturing capacity and management's expectation for improvement, suggesting future growth potential.

Asked by Dhiraj Kaswan

Phase 2 Capex completion timeline and expected run rate. Evasive
We plan to invest about Rs. 100 crore and we plan to do this by the second-half of FY '26. And I think it should be taking about anywhere from 6 to 10 months to put the plant in place. ... This is very fluid, I wouldn't want to answer it because I do not have exact numbers as of now, and it depends a lot on how we perform.

Provides concrete timeline and investment for Phase 2, but management's reluctance to provide a run rate suggests uncertainty or early-stage planning for its financial impact.

Asked by Varun Gupta

Seasonality of the toy business and its impact on future performance. Direct
earlier, our business was seasonal because we were doing more of institutional oriented products... Now the growth that we are getting is not from the institutional oriented product, it is more from the retail oriented products. So yes, we do expect a slight decline seasonally, but it's not going to be substantial like how it was before.

Clarifies a shift in the toy business model from institutional to retail, which is expected to reduce seasonality and provide more stable growth.

Asked by Madan Mohan

Falling automotive revenue and the company's strategy to derisk this business. Direct
this is not just to do with our company, the CV market itself has been down and hence the numbers have been down. But we have adopted a strategy where we are now derisking this business as well. Say if this CV market underperforms in the coming years also, we should be getting some growth coming in from the non-automotive part of the business.

Addresses a key concern about the declining automotive segment and outlines management's strategy to mitigate this risk through diversification.

Asked by Dhiraj Kaswan

Funding strategy for the ₹100 crore Phase 2 expansion (equity vs. debt). Partial
this is something that we are still deciding. But having said that, there is a lot of interest from equity side of point of view also as well as from debt point of view also. But we will not be kind of getting into a situation where we have a substantial amount of debt sitting on our balance sheet... I think it will largely be equity, but if we need some debt we will go ahead with that also, it depends.

Indicates management's preference for equity funding to avoid high debt, but also flexibility, which is crucial for investors monitoring balance sheet health.

Asked by Rajat Sethia

Strategic focus on own brands versus contract manufacturing for toys. Direct
No, it will be both ends. We are also growing our own brand. But with this BIS introduction, the China imports stopping, with now the tariff situation, there is growth and there is a lot of demand coming on for OEM manufacturing as well. And if we do not cater to that, someone else will. So we do not want to miss out on that opportunity. So, it will be both ways.

Clarifies the dual strategy for the toy segment, leveraging both own brand growth and the significant OEM manufacturing opportunity driven by market shifts.

Asked by Rajat Sethia

Current demand source (domestic vs. export) for toys. Direct
The demand right now, 95% of our current supply is to the domestic market.

Provides clarity on the current market focus, indicating that the export-oriented Phase 2 expansion represents a significant strategic shift for future growth.

Asked by Rahil Shah

2 min read 6 chapters

Detailed narrative

Q4 FY25 Performance Overview

OK Play India reported an approximate revenue of ₹58 crore in Q4 FY25, marking a modest 3% decline compared to the same quarter last year. This overall performance was influenced by contrasting trends across its key segments. The company's blended EBITDA margin for the quarter stood at approximately 20%, which management confirmed is sustainable and within their target range of 20-22%.

Automotive Components Division

The automotive components division experienced a 25% YoY decline in Q4 FY25, with revenue dropping to ₹30 crore from ₹40 crore in Q4 FY24. This underperformance is attributed to broader market trends within the commercial vehicle (CV) sector. To mitigate this, the company is actively diversifying its revenue streams by manufacturing roto and blow molded components for new clients like Vestas and Indocool, and secured a strategic order from Escorts, with meaningful contributions expected from FY26.

Toy Segment Growth & Opportunity

The toy segment emerged as a key growth engine, achieving a robust 40% quarter-on-quarter growth to ₹28 crore in Q4 FY25. This growth is driven by a shift from institutional to retail-oriented products, reducing seasonality. The Indian toy sector is on an impressive growth trajectory, supported by government initiatives, a 145% US tariff on Chinese imports, and declining Chinese toy imports into India, creating a significant market opportunity for domestic manufacturers.

Air Filtration Business with MANN+HUMMEL

OK Play's subsidiary, MRH Technologies Private Limited, has an exclusive 10-year licensing agreement with MANN+HUMMEL for manufacturing and distributing air purifiers in India. Pilot deployments have shown over 80% reduction in PM levels, and the company is planning a commercial launch of these products in the current year (FY26), positioning it as a pan-India business and a new revenue stream.

Expansion Plans & Strategy

The company has completed Phase 1 of its toy expansion, investing ₹50 crore to achieve a capacity of ₹14-15 crore per month, currently operating at ₹9-10 crore per month due to teething issues. Phase 2 involves a planned investment of ₹100 crore by the second half of FY26, focusing on injection-molded, battery-operated, and role-play toys primarily for the export market. Management aims for a ₹1,000 crore business, which necessitates a strong export focus beyond the domestic market's ₹200-400 crore potential.

Capital Allocation & Funding

Management indicated that the ₹100 crore investment for Phase 2 will largely be funded through equity, though debt remains an option if needed, emphasizing a commitment to avoiding substantial debt on the balance sheet. The company has also been actively reducing its debt in previous quarters. A preferential allotment is currently underway and expected to close shortly, which will contribute to funding growth initiatives.

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