One of the EMS stocks engaged in the business of the electronic products vertical, such as consumer electronics, lighting, home appliances, closed-circuit television cameras (CCTVs), and mobile phones. The stock has jumped 6.05 percent after a contract manufacturing agreement with Compal Smart Device India Private Limited for the manufacturing of mobile phones.
Stock Price Movement:
In Monday’s trading session, Dixon Technologies (India) Limited’s share jumped by 6.05 percent from the previous close of Rs. 15,805.10. The stock opened at Rs. 16,099.80 and is currently trading at Rs. 16,761, with a high of Rs. 16,580 and a low of Rs. 16,020.80. The market capitalization now stands at approximately Rs. 99,081.43 crore.
What is the news?
Dixon Technologies Limited’s wholly owned subsidiary, Padget Electronics, has partnered with Compal Smart Device India Private Limited to launch mass production of Google Pixel smartphones. This collaboration aims to manufacture the devices for Google Information Services India Private Limited, marking a significant milestone in the partnership between the companies.
The agreement strengthens Dixon’s position in the smartphone manufacturing sector and aligns with its strategy to expand in the high-demand electronics market. Padget Electronics and Compal will work together to meet the production requirements and ensure quality output.
Segment Performance:
Dixon Technologies Limited reported strong growth across its segments in FY24. The mobile phone segment saw a remarkable increase in revenue to Rs. 9,444 crores, with a 235% YoY growth in operating profit.
The company acquired Ismartu in August 2024, contributing Rs. 1,100 crores from 800K smartphones in Q2. Additionally, Dixon plans to boost its smartphone capacity by 400K units monthly through a new Noida facility.
The consumer electronics segment, including LED TVs and refrigerators, posted revenues of Rs. 1,413 crores, while home appliances grew by 22% YoY, generating Rs. 444 crores. Telecom and networking products saw a strong revenue of Rs. 660 crores, with significant growth projections.
Target:
Nomura has set a target price of ₹18,654 for Dixon Technologies, predicting an 18% upside. The company’s strategic partnership with Google for Pixel smartphone production under the China+1 strategy could add ₹1,500 crore in revenue.
Dixon plans to diversify, with the mobile segment expected to contribute 60-65% by FY26. Future growth will focus on expanding telecom and IT hardware and enhancing its portfolio and market presence.
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Guidance and Future Outlook:
Dixon Technologies (India) Limited aims to maintain strong revenue growth fueled by rising demand and new customer acquisitions.
The mobile phone segment is expected to lead this growth, with IT hardware and component businesses also contributing. While specific volume guidance isn’t provided, management remains confident due to a robust order book and market demand.
Recent quarter results and ratios:
Dixon Technologies Limited’s revenue has increased from Rs. 4,943 crore in Q2 FY24 to Rs. 11,534 crore in Q2 FY25, which has grown by 133.34 percent. The net profit of Dixon Technologies Limited has also grown by 265.49 percent, from Rs. 113 crore in Q2 FY24 to Rs. 412 crore in Q2 FY25.
Dixon Technologies Limited’s revenue and net profit have grown at a CAGR of 42.75 percent and 42.87 percent, respectively, over the last five years.
In terms of return ratios, the company’s ROCE and ROE should be 29.2 percent and 24.7 percent, respectively. The debt-to-equity ratio of the company is to be 0.36x, which shows the company is almost debt-free. Dixon Technologies Limited’s EPS is to be Rs. 120.
Company Overview:
Dixon Technologies (India) Limited, incorporated in 1993, is an Electronic Manufacturing Services (EMS) company specializing in a wide range of electronic products, including consumer electronics, lighting, home appliances, CCTV cameras, and mobile phones.
The company also handles reverse logistics operations and manufactures security surveillance equipment, wearables, audibles, and AC-PCBs. Recently, Dixon entered into a joint venture with Imagine Marketing Private Limited to design and manufacture wireless audio solutions in India.
Written By – Nikhil Naik
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