The shares of this leading semiconductor stock plunged over 3 percent on Wednesday after a global brokerage flagged key competition issues that may be hampering its business. In this article, we will discuss more about it in detail.
With a market capitalisation of Rs 85,183 crores, the shares of Dixon Technologies (India) Ltd are currently trading at Rs 14,085 per share, down by 26.45 percent from its 52-week high of Rs 19,149.80 per share. Over the past five years, the stock has delivered an impressive return of 1,162 percent.
Leading brokerage firm Philip Capital has slashed its target price to Rs 9,085 per share from Rs 11,077 per share earlier, which is a massive reduction of 18 percent as it sees a major headwind ahead.
According to PhillipCapital, Motorola, which is Dixon’s largest client, has begun to shift volumes domestically to Karbonn, which already accounts for 25 percent of Motorola’s monthly production, and is expected to rise by 35 percent by June.
Motorola contributes approximately 40 percent of Dixon’s volumes to mobile phones, but it is about 72 percent of its mobile revenues. Dixon started to gain from Motorola’s market share acquisition in the Indian smartphone market in CY24 compared to CY23. The brokerage cited that because of this major issue, it declined its FY27 revenue, EBITDA, and PAT by 4 percent, 6 percent, and 9 percent, respectively.
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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 110.44x as compared to its industry average of 36.20x.
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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