Synopsis:
A leading EMS player posted stellar Q1 growth with doubled profits and robust mobile segment performance. Backward integration, JVs, and exports fuel expansion, while global brokerage sees 26% upside, projecting $11 billion revenue by FY28, ensuring scalability beyond PLI support.
India’s consumer electronics sector was valued at about USD 84 billion in 2024 and is projected to reach over USD 150 billion by 2033, growing at a CAGR of nearly 7%. Driven by rising incomes, urbanization, and internet penetration, now over 950 million users, the industry is adopting smart and connected devices backed by strong government policies and local manufacturing.
With a market capitalization of Rs 1,07,928.24 crore, the shares of Dixon Technologies (India) Ltd were at Rs 17,835.35 per share, decreasing around 2 percent as compared to the previous closing of Rs 18,192.55 apiece.
UBS, one of the well-known brokerages globally, has upgraded to a ‘Buy’ rating & raised its target price on this EMS stock to Rs 23,000 per share, indicating a potential upside of 29 percent from Friday’s price of Rs 17,835.35 per share.
Dixon is strategically expanding into non-semiconductor smartphone components, including displays, camera modules, enclosures, and batteries, marking its next growth phase.
According to UBS, this backward integration could significantly enhance operational efficiency, potentially boosting EBITDA margins by 110 basis points by FY28E, well above expectations of 40 basis points. The expansion is designed to offset the anticipated phase-out of the mobile PLI scheme by FY26, positioning Dixon for stronger profitability and a more diversified product portfolio in the evolving electronics manufacturing ecosystem.
UBS highlights Dixon’s inorganic expansion through multiple JVs and acquisitions, reflecting its strategy to unlock growth by broadening TAM, achieving vertical integration, entering new product categories, and strengthening global partnerships, positioning the company for sustained long-term scalability.
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Dixon is projected to achieve $11 billion in revenue by FY28E, 2.5× FY25 estimates. Growth drivers include expanding component sales beyond captive use, boosting exports, entering new verticals like networking and servers, and exploring potential inorganic opportunities.
The company delivered strong growth in Q1FY26, with revenue surging 95% to Rs 12,836 crore from Rs 6,580 crore a year ago. Net profit also doubled to Rs 280 crore from Rs 140 crore, reflecting operational efficiency and improved demand momentum, showcasing robust business fundamentals and financial strength.
Dixon’s mobile segment delivered stellar growth in Q1FY26, with revenue up 125 percent YoY to Rs 11,663 crore and operating profit rising 131 percent to Rs 395 crore. In Q2, demand for smartphones looks even stronger, with robust order visibility, and festive season tailwinds support momentum. Strategic JVs, backward integration, and expansion in Noida further strengthen its leadership, enhancing scale, profitability, and long-term competitiveness.
Dixon sees massive export growth, targeting Rs 7,000 crore in FY26 against Rs 1,600 crore last year, with potential to scale to Rs 11,000–12,000 crore. Exports to Africa have begun, with large anchor opportunities ahead. Management remains confident of sustaining growth beyond PLI, leveraging strong customer relationships, JVs, and backward integration to offset incentive losses effectively.
Written by Abhishek Singh
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