In Tuesday’s early trade, the shares of India’s second-largest mobile phone manufacturer gained 3 percent to an intraday high of ₹7,877.95 per share after the company entered a share purchase agreement with electronics and mobile phone manufacturers to strengthen their leadership and manufacturing capabilities.
At 11:05 a.m., Dixon Technologies Ltd. shares were quoted at ₹7,728 per share, up ₹92.35, or 1.21 percent, from the previous close price. The company has a market capitalization of ₹46,264 crore.
Dixon Technologies Limited has entered into a Share Purchase Agreement with Ismartu In Pte. Limited (“Ismartu Singapore”), Transsion Technology Limited, 5A advisors LLP, and Ismartu India Private Limited (“Ismartu”) for proposed acquisition of majority stake constituting 50.10% and further acquisitions in tranches in Ismartu and a Shareholders’ Agreement with Ismartu Singapore, 5A Advisors LLP, and Ismartu for operation and management of Ismartu.
Ismartu specializes in the manufacturing of electronics and mobile devices, operating three state-of-the-art manufacturing facilities in Noida under the brand names of ‘Itel,’ ‘Infinix,’ & ‘Tecno.’ It stands as a key player in the Indian market, leading in the categories of smartphones and feature phones, respectively.
This acquisition will solidify the company’s position and maintain its leadership in India’s mobile phone manufacturing industry. According to Dixon management, the “ISMARTU” team brings valuable experience, knowledge, resources, engineering expertise, and additional manufacturing capabilities to the table. Together, both companies will capitalise on growth opportunities in India’s expanding EMS industry.
Dixon Tech currently has 17 manufacturing facilities totaling 2.5 million square feet, with plans to develop 23 plants totaling 4.8 million square feet by FY 2024.
Recently, On February 23, 2024, Dixon Technologies inaugurated a new manufacturing unit at Dehradun, Uttarakhand, for the manufacturing of washing machines, boasting the company’s annual production capacity of 24 lakhs.
Dixon Technologies Ltd. has seen impressive growth, with its shares surging by 51% over the past six months and a staggering 159% over the last year.
The company commands significant market shares, including 35% in LED TVs, 30% in washing machines, 25% in security surveillance systems, and 50% in lighting solutions. Notably, Dixon Technologies Ltd. stands as the fourth-largest LED light manufacturer globally and holds the top position in India, specializing in LED lamp production.
In the third quarter of FY23, revenues soared to ₹4,818 crore, marking a 100% increase from ₹2,405 crore. Simultaneously, net profit surged to ₹97 crore, reflecting an 86% improvement from ₹52 crore in the same quarter of the previous fiscal year.
Domestic revenue accounted for 91 percent of the company’s revenue in the previous fiscal year, while export sales accounted for 9 percent. In the current fiscal year, the company has set aside Rs 450 million for capital expenditure.
In FY 22-23, the company generated considerable cash from operations of ₹726 crores, which was used to support a capex of ₹ 450 crores and decrease gross debt by ₹ 275 crores, further strengthening the balance sheet.
Dixon Technologies Limited is the largest company engaged in manufacturing products in the consumer durables, lighting, and mobile phone markets in India. Their diversified product portfolio includes consumer electronics, home appliances like washing machines, lighting products, tube lights, downlighters, mobile phones, and many more.
Written by Omkar Chitnis
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