Shares of this large-cap company jumped around 2 percent after entering into an agreement with Nokia for the manufacturing of Telecom products. The shares have delivered a multibagger return of 190 percent to its shareholders in one year.
With a market capitalization of Rs. 50,438 crores, the shares of Dixon Technologies (India) Ltd started Wednesday’s trading session on a higher note at Rs. 8,374 compared to its previous of Rs. 8,303.95. During the trading session, the shares hit a high of Rs. 8,481.95, gaining around 2 percent and are currently trading at Rs. 8,455 apiece.
Such a positive movement in the share price was observed after the company in an exchange filing announced that one of its subsidiaries, Dixon Electro Appliances Private Limited had entered into an agreement with Nokia Solutions and Networks OY (“Nokia”) for development and manufacturing of Telecom products. The manufacturing shall take place at the company’s manufacturing facility situated in Noida, Uttar Pradesh.
Coming onto the company’s financial statements, the revenue decreased by around 3 percent from Rs. 4,943 crores during the September quarter to Rs. 4,818 crores in the March quarter. On the other hand, the net profits declined 14 percent from Rs. 113 crores to Rs. 97 crores during the same period.
In the mobile phones business, Dixon manufactured 11 million smartphones and 26 million feature phones in 9M FY2024, added capacities across 4 plants, and signed deals with 2 large global brands, with production starting soon.
Furthermore, the company is exploring export opportunities in the lighting business and planning to launch new professional and industrial lighting solutions and aims to capture a 35 to 40 percent share of India’s smartphone market.
Additionally, Dixon Technologies is significantly tapping outsourcing opportunities from brands, with a focus on expanding into new segments like electronics/IT products and LED lights and AC components.
Moreover, the company has a strong market position in key verticals such as the manufacturing of TVs, washing machines, LED and CFL lights, and mobile phones and has established relationships with a diverse top-tier customer base, including global and national brands and domestic retail private labels.
Due to increasing operating revenue and profits on a YoY basis, the profitability metrics of the company improved with the return on equity (RoE) increasing from 21.95 percent during FY 21-22 to 22.36 percent in FY 22-23, and, the return on capital employed (RoCE) zoomed from 22.24 percent to 23.36 percent during the same timeframe. Furthermore, the net profit margin increased from 1.78 percent during FY21-22 to 2.09 percent during FY22-23.
Incorporated in 1993, Dixon Technologies specializes in manufacturing consumer durables, lighting products, and mobile phones. They offer a range of products such as LED TVs, washing machines, tube lights, smartphones, laptops, set-top boxes, medical electronics, lights, and security surveillance systems.
Written By Vaibhav Patil
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