This toy maker’s diversification strategy will baffle you!

The company

OK Play is a small-cap toy manufacturer. However, it has also diversified into making commercial vehicle fuel tanks and electric three-wheelers.

The recent rally

Despite its bizarre diversification, the stock has soared 3x in 2 years and currently trades at a P/E of 348 times.

Our findings

We decided to dive into the books of this perplexing company. Swipe to know what we found.

Outlandish projections

It believes it can double the revenue from its toy business every year for the next 5 years. Its past performance, however, does not evoke confidence.

History of losses

It incurred losses in four out of the last five years. Its three-wheeler business also remains a loss-making venture.

More absurd diversifications

Its tale of perplexing diversifications does not end at three-wheelers. It recently started manufacturing air purifiers.

Flip-flop decision making

Since December 2023, the management has scrapped a share split, raised ₹43 cr through equity share issues, and then planned another split.

A cautionary tale

Don’t get swayed by the rally. While there is a possibility that it may meet its lofty targets, the odds are high.

The full story

To read a more detailed take on OK Play, swipe up.

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