The shares of this large-cap company jumped around 2 percent after signing an MoU with HP for manufacturing notebooks, desktops and All-in-one PCs for HP under the PLI 2.0 scheme. In one year, the stock has delivered more than 140 percent return to its shareholders.
Price Movement:
With a market capitalization of Rs. 74,945 crores, the shares of Dixon Technologies (India) Ltd started Tuesday’s trading session on a higher note at Rs. 12,675, gaining around 2 percent compared to its previous close of Rs. 12,401.45 and are currently trading at Rs. 12,518 apiece.
What Happened:
Such a positive movement in the share price was observed after the company in an exchange filing announced that one of its subsidiaries company Padget Electronics Private Limited entered into an MoU with HP India Sales Private Limited for the manufacturing of notebooks, desktops and All-in-one PCs, under PLI 2.0 subject to signing of definitive agreements in due course.
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Management Commentary:
Commenting on this association, Mr. Atul B. Lall, Vice Chairman & Managing Director Dixon Technologies (India) Limited said, “It gives us immense pleasure to partner with the iconic brand HP to manufacture PCs under PLI 2.0. HP is a leading global player in their field known for their technologically advanced products with a worldwide presence in more than 170 countries.
We are sure that with HP’s vision and rigorous industry-leading processes, combined with our expertise in manufacturing, we will be able to bring a range of HP personal systems to Indian customers.”
Financials:
Looking at the company’s financial statements, the revenue zoomed by around 41 percent from Rs. 4,658 crores during the March quarter to Rs. 6,580 crores in the June quarter. In addition, the net profits surged by 44 percent from Rs. 97 crores to Rs. 140 crores during the same period.
Management Guidance:
The company expects slow growth for FY25 due to its ongoing ramp-up phase. The anticipated deceleration is attributed to the necessary adjustments and expansions currently underway.
Moreover, the company targets a revenue of Rs 3,500 crores for FY25 and plans to reach Rs 48,000 crore over the next six years in the IT hardware segment. It is currently in discussions with two major global original equipment manufacturers (OEMs) regarding server contracts.
Important Financial Ratios:
In terms of key financial metrics, the company reported a Return on Equity (RoE) of 21.69 percent and a return on capital employed (RoCE) of 24.70 percent for the period spanning FY23-24. Further, the net profit margin during FY23-24 was 2.06 percent.
Company Profile:
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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