Synopsis:
Dixon Technologies is in focus after CLSA and Nomura have turned bullish on the company, especially after its JV with Chongqing Yuhai.
The shares of this electronic manufacturing giant are in focus after leading brokers like CLSA and Nomura expect the company to outperform in the future. One broker expects its stock to rise by 35 percent. In this article, we will dive deep into the details.
With a market capitalization of Rs 98,306 crores, the shares of Dixon Technologies (India) are currently trading at Rs 16,255 per share, down by 15.11 percent from its 52-week high of Rs 19,149.80 per share. Over the past five years, the stock has delivered a robust return of 1,156 percent.
Brokerage Comments
CLSA has assigned a Buy call on the stock with a target price of Rs 19,000 per share, signalling an upside potential of 20 percent from its previous closing price of 15,823 per share.
CLSA anticipates that Dixon’s contribution to the smartphone market will jump from 15–17 percent to an impressive 45–55 percent. This surge is expected to be fueled by strategic moves like acquiring a 51 percent stake in Q Tech India for camera modules and forming a 74:26 joint venture with Chongqing Yuhai for enclosures.
Coupled with its display joint venture with HKC, CLSA believes these initiatives could enhance margins by 150–200 basis points and open up new revenue opportunities through external sales.
On the other hand, Nomura also assigned a Buy call on the stock with a target price of Rs 21,409 per share, signalling an upside potential of 35.30 percent from its previous closing price of Rs 15,823 per share.
Nomura pointed out that Dixon’s move into the camera module and precision components sectors through its 51 percent stake in Q Tech India and a 74 percent joint venture with Chongqing Yuhai represents a significant step in enhancing value addition.
They estimate that this strategy could increase EPS by about 5 percent. Additionally, they mentioned that acquiring an established Indian company helps speed up integration and sidesteps regulatory hurdles, leading to quicker execution.
Financial Highlights
Dixon reported a revenue growth of 120 percent to Rs 38,860 crores in FY25 from Rs 17,691 crores in FY24. Its net profit surged by 229 percent to Rs 1,233 crores in FY25 from Rs 375 crores in FY24.
The stock delivered an ROE and ROCE of 32.92 percent and 39.81 percent, respectively, and is currently trading at a high P/E of 126.71x as compared to its industry average of 38.12x.
Dixon Technologies (India) Limited is a top electronics manufacturer that provides ODM and OEM services in India and worldwide. The company provides LED TVs, AC PCBs, washing machines, refrigerators, LED lighting, mobile phones, medical devices, wearables, set-top boxes, and security systems. The company also offers repair, refurbishment, and IT hardware services.
Written by Satyajeet Mukherjee
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