Release Date: April 23, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- OK Play India Ltd (BOM:526415, Financial) reported a 40% growth in its toys segment for Q4 FY25 compared to the previous year, indicating strong momentum and increasing market share.
- The company has secured strategic orders from prominent clients like Vestas, IndoCool, and Escorts, which are expected to contribute meaningfully to revenues from FY26 onwards.
- The Indian toy sector is on a growth trajectory, with exports surging by 239% from FY15 to FY23, and the industry is expected to reach $3 billion by 2028.
- OK Play India Ltd (BOM:526415) is exploring the passenger vehicle segment and has started diversifying its revenue streams beyond the automotive space.
- The company has a strategic partnership with MANN+HUMMEL for air purifiers, which aligns with its sustainability vision and is poised to address a critical need in urban development and institutions.
Negative Points
- The automotive components segment witnessed a sequential decline of around 25% in Q4 FY25, reflecting broader market trends within the commercial vehicle sector.
- There was a modest decline of about 3% in overall revenue for Q4 FY25 compared to the same quarter last year.
- The company is facing teething issues in ramping up its toys production capacity, which has affected its ability to reach optimum capacity utilization.
- The commercial vehicle market, a significant part of the company's business, has been underperforming, impacting revenue from this segment.
- The company has high trade receivables, which could impact cash flow and financial stability if not managed effectively.
Q & A Highlights
Q: What were the revenue bifurcations in Q4 for the toys and auto segments?
A: In Q4, we achieved approximately INR28 crores in the toys segment and INR30 crores in the automotive segment. In the previous year, Q4 FY24, the automotive segment was INR40 crores, and the toys segment was INR20 crores.
Q: What are the plans for the excess land in Chennai?
A: Currently, the land is used for our automotive business serving southern India. We are considering using it for Phase 2 of our toys plant, but no final decision has been made yet.
Q: From which segment do you expect maximum revenue in the next two years?
A: We are optimistic about the toys segment due to government support and market dynamics. Additionally, we expect significant growth from our air filtration business.
Q: What is the average cash collection period for your business segments?
A: The average cash collection period is 90 days for the automotive business and 60 days for the toys business.
Q: How will the US tariffs on Chinese toys impact your business?
A: The US tariffs present a golden opportunity for us. With tariffs on Chinese toys at 145% compared to India's 10%, we expect to gain market share. Ongoing trade discussions may further reduce India's tariff to 6-7%.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
