Funskool, the toy-making subsidiary of tire giant MRF, plans to reach ₹400 crore in revenue by fiscal 2027. The company is relying on an export-heavy strategy, which currently accounts for 70% of its business, alongside new investments in production capacity.
Funskool, a subsidiary of the tire manufacturing major MRF, has set an ambitious goal to achieve ₹400 crore in revenue by March 2027. This target marks a 20% growth from the ₹329 crore revenue the company reported in the previous fiscal year. To reach this milestone, the company is focusing on expanding its production capabilities and shifting its product mix toward educational toys.
The toy manufacturer currently generates about 70% of its business from exports, with the United States and Europe acting as key markets. Because such a large portion of its operations relies on selling products abroad, the company is particularly sensitive to global demand and international logistics costs. To support its expansion, Funskool has earmarked ₹30 crore for capital spending to increase production at its facilities in Ranipet and Goa.
While the company is pushing for growth, the toy sector faces persistent challenges. Management has pointed to geopolitical tensions that continue to increase raw material and shipping expenses. These costs can put pressure on profit margins. Additionally, despite the growth of India’s toy manufacturing sector, the country currently holds only about 0.5% of the global export market, leaving a significant gap compared to dominant players like China.
For investors following MRF, it is important to note that Funskool represents a small portion of the overall business. While the growth in the toy division is a positive sign for the subsidiary's development, it has a limited impact on the consolidated financial performance of the parent company, which remains heavily driven by its core tire business.
Funskool is attempting to differentiate itself by focusing on STEM-based kits—toys that integrate science, technology, engineering, and mathematics. This move is designed to meet the rising demand for educational tools that help children develop critical-thinking skills. Going forward, the primary monitorables for the company will be its ability to manage input cost volatility, successfully scale its export volumes, and maintain profit margins in a competitive global toy market.