Funskool eyes ₹400 crore turnover amid China dependence

Funskool India is targeting turnover of over ₹400 crore in FY27, banking on international partnerships and manufacturing expansion, even as India’s toy industry grapples with dependence on China for specialised tooling and electronic components.

The company expects to close FY27 with revenue of ₹380-400 crore, against its budget of ₹350 crore, said K. A. Shabir, chief executive officer of Funskool India. It recorded around ₹250 crore in the first half. New projects awarded in September could help it cross ₹400 crore, provided production begins in January, he said.

Funskool is expanding its international portfolio through partnerships with Simba Toys of Germany, Moltó of Spain, Buffalo Games of the US, Sanrio of Japan, Spin Master of Canada and Asmodee of France. The arrangements cover licensed manufacturing and distribution of international toy brands in India, alongside production for overseas partners and expansion of its own portfolio.

Exports account for around 70% of Funskool’s business, with products shipped to more than 63 countries. The Americas contribute about 44% of exports and Europe around 40%, with the remainder coming from other regions. Geopolitical developments have pushed up input and logistics costs, Mr. Shabir said.

Capacity expansion

To support the perceived growth, the company is adding around 90,000 sq ft of factory space at Ranipet through construction and leasing, while expanding its Goa facility by about 80,000 sq ft. It currently operates three factories, one in Goa and two in Ranipet.

The expansion comes as India seeks to increase its share of the global toy market from around 1% to 5% by 2032. Commerce and Industry Minister Piyush Goyal announced the target in July and said a task force would identify measures to boost domestic manufacturing and exports.

China dependence

Despite the growth ambitions, the absence of a domestic ecosystem for specialised manufacturing tools remains a key constraint. Indian toy makers continue to depend on China for such equipment, as well as low-cost and high-end electronic components.

High capital expenditure compounds the problem. Toys typically have product life cycles of around a year, making it difficult to recover investments in specialised tools. Automation is viable only when machinery can be deployed across multiple products, Mr. Shabir said.

India is seeing smaller electronics manufacturers emerge, and Funskool is exploring ways to develop them. However, rising silicon prices and supply delays remain challenges.

Labour availability and attrition are other concerns. While Ranipet in Tamil Nadu traditionally offered an accessible workforce, labour is no longer as readily available, he said. Attrition among engineering and managerial staff was around 10% last year, while factory-worker attrition was considerably higher.

Funskool is exploring automation in digital printing and packing to manage workforce requirements as operations expand.