Shares of India’s largest electronics manufacturing company under the ‘mid-cap’ category gained traction this week after DAM Capital recommended a Buy rating to an upside of 17.5 percent based on Tuesday’s closing price.
Dixon Technologies
With a market capitalization of 30,367 Cr, On Thursday the shares of Dixon Technologies were trading at Rs 5,255,In the last six months it has delivered returns of 81.85 percent and 21.23 percent in one year.
DAM Capital, one of the well-known Investment Banks, has given a ‘Buy’ tag to the company’s stock with a target price of Rs 6000 indicating a potential upside of 17.5 percent as compared to Tuesday’s closing price of Rs 5,102 per share.
The rationale behind providing such a recommendation pertains to various trigger points comprising the company’s participation in the union government’s production linked incentive (PLI) scheme for IT hardware, strong traction of ramp up in mobile manufacturing and company’s mobile segment revenue can see 70 percent CAGR in next 3 years.
It can see large client additions in the laptop segment, contributing capex of 250 crore with revenue potential of 48,000 crore over six years and considering its robust execution capabilities along with investment in digitisation and research & development.
According to the recent financials of the company, it has reported an increase in the revenue from 10,697.08 Cr in FY22 to 12,192.01 in FY23. Moreover, the company’s net profits have increased from 190.33 Cr to 255.08 Cr.
The company has reported a return on equity (ROE) of 22.63 percent and return on capital employed (ROCE) of 27.98 percent, which indicate a good return on equity and efficient use of the company’s resources.
According to the latest shareholding data available for the June 2023 quarter, the company’s Promoters hold 34.04 percent stake, Domestic Institutional Investors hold 24.60 percent and the Foreign Institutional Investors hold 15 percent.
Dixon Technologies provides manufacturing and design focused solutions in consumer durables, home appliances, lighting, mobile phones, security devices, set top boxes, wearables and medical equipment to customers across the globe, along with repairing and refurbishment services of LED TV panels.
It serves as original equipment manufacturer (OEM) as well as original design manufacturer (ODM) to famous well known brands like Samsung, Xiaomi, Philips, Panasonic etc.
Written by: Bharath K.S
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