Following Q3 reports, Dixon Technologies’ stock fell more than 8% in early trading today. On the BSE, the shares dropped 8.50% to Rs 16,060. 4576 shares of the company were traded on the BSE, generating a turnover of Rs 7.45 crore. The company’s market value dropped to Rs 97,438 crore. Motilal Oswal, however, gave the stock a buy call with a 17% upside. It set a target price of Rs 20,500 for the stock of electronic items.
According to the brokerage, PAT was below our projections due to increased depreciation, interest, and minority interest. Today’s stock mood was impacted by this.
According to the brokerage, Dixon Technologies (Dixon) posted higher-than-expected sales and EBITDA, fueled by the mobile and EMS segment’s robust performance.
The business anticipates that display manufacture will start in 1Q/2QFY26 and is consistently working to increase backward integration. We anticipate that the display facility’s additional margin will balance out the decline in margins brought on by the PLI scheme’s termination by FY26. The company is expecting government guidance from the anticipated component PLI scheme and is also considering entering the display fabs market. We raise our DCF-based TP to Rs 20,500 on March 27 estimates and update our estimates for FY25, FY26, and FY27 by -8%, -4%%, and 7% to account for greater mobile segment revenues and lower consumer electronics revenues. “Buy again,” Motilal Oswal remarked.
With a target price of Rs 12,600, international brokerage Jefferies kept its underperform rating on the company.
The brokerage stated that although earnings exceeded forecasts, the risk-reward ratio was still stretched at 106x for FY26.
Despite not being a branded B2B EMS player, Dixon Tech trades higher than branded B2C businesses. Over FY24–27, it anticipates a 45%/49% sales/PAT CAGR. According to Jefferies, the company’s operating margin is expected to stay steady at 4%.
Nuvama increased its price target but kept its hold call on the stock.
A robust ramp-up in the mobile category (revenue/EBITDA up 190%/210% YoY) was a major factor in Dixon’s Q3FY25 revenue/EBITDA/PAT increase of 117%/112%/78%, the brokerage reported.
In order to account for i) the poorer TV performance; ii) the Vivo joint venture; and iii) the complete Ismartu consolidation, we are reducing the FY25E/26E/27E PAT by -3%/5%/10% (Q3 is the first full quarter). Based on 65x FY27E EPS, we roll forward value to March 26 and get a TP of Rs 18,790 (previously Rs 16400); we maintain a “HOLD” on fair valuation,” Nuvama stated.
Dixon Technologies’ earnings during the quarter that ended in December 2024 were excellent. At Rs 217 crore, net profit increased 124% year over year. The third quarter profit for the previous fiscal year was Rs 97 crore.
In the December 2024 quarter, revenue increased by 117% to Rs 10,461 crore. In the October–December quarter, Dixon Technologies’ EBITDA more than doubled to Rs 398 crore.
The biggest domestic design-focused solutions company in India, Dixon Technologies (India) is involved in contract manufacturing goods for the consumer durables, lighting, and mobile phone industries.
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