&w=3840&q=100)
Dixon Tech Q1 beats estimates; analysts upbeat on mobile gains, JV strategy
The company reported a 95 per cent Y-o-Y growth in revenue and a doubling of net profit, beating most street estimates. While Ebitda margins were slightly down, analysts see strategic levers in place to support medium-term expansion.
Domestic brokerage Nuvama Institutional Equities noted that Dixon Technologies once again posted a strong quarter, with revenue, Ebitda, and PAT growth of 95 per cent, 95 per cent, and 68 per cent, respectively, each surpassing their estimates.
The strong show was led by a 125 per cent Y-o-Y jump in the mobile segment's revenue and 131 per cent Ebitda growth. The brokerage highlighted that Dixon Technologies retained its mobile volume guidance (42-43 million and 65-67 million units including the Vivo JV) and elaborated on component-related JVs. These include tie-ups for camera modules, enclosures, and precision components aimed at participation in the ECMS scheme. Track Stock Market LIVE Updates
While Nuvama acknowledged concerns about potential margin pressure in H1FY27 following the expiry of the PLI scheme in March 2026, it underscored management's confidence in achieving a 130-150 basis points (bps) margin expansion over the medium-term. It maintained a 'Hold' rating with a June 2026 target price of ₹16,100, citing fair valuation.
Motilal Oswal also highlighted the strong beat across revenue, Ebitda, and PAT, with the mobile segment again being the standout performer. The integration of Ismartu, improved exports, and higher client volumes drove robust growth. The brokerage stressed upon Dixon Technologies's two-pronged strategy, including strengthening client relationships through JVs and enhancing backward integration via component partnerships.
Motilal pointed to the company's strategic alliances – including a display facility with HKC, camera modules with Qtech, and precision components with Chongqing Yuhai – as key steps toward improving Dixon Technologies' margin profile and boosting customer stickiness. Additionally, the JV with Longcheer and Vivo is expected to provide incremental volume growth.
Factoring in the strong outlook, Motilal Oswal raised its FY27 estimates by 10 per cent and maintained a 'Buy' rating with a revised target price of ₹22,100 (₹20,500 earlier) based on DCF valuation.
Emkay Global echoed a similarly positive tone, noting that Dixon Technologies' revenue growth beat consensus estimates, led by strong performance in the mobile and EMS segments. The brokerage reaffirmed its confidence in Dixon's mobile volume guidance for FY26 and FY27 and highlighted the management's reiteration of 120-150bps margin expansion in the mobile vertical, despite PLI-related headwinds.
Emkay sees the company benefiting from scale, strong client relationships, and backward integration. The management's commentary on diversifying into PCBA for industrial and automotive applications was also seen as a positive trigger for Dixon Technologies' next phase of growth.
While Emkay slightly cut its DCF-based target price to ₹19,000 (to reflect minority interest from new and upcoming JVs), it maintained a 'Buy' rating, citing sustained competitive advantages and margin expansion drivers.
That said, while the impending expiry of mobile PLI benefits poses a risk to margins, brokerages remain optimistic about Dixon Technologies' growth trajectory. Strategic JVs, robust mobile volumes, and a clear focus on backward integration are seen as key enablers of long-term value creation.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Time of India
2 hours ago
- Time of India
State's crude steel capacity rises by 6.15MT in 5 years: Min
1 2 Kendrapada: Steel industry in Odisha has witnessed substantial growth, with the state now hosting 60 operational plants — 59 private and 1 public, Union minister of state for steel Bhupathiraju Srinivasa Varma has informed the Rajya Sabha. The state's crude steel capacity has increased by 6.15 million tonnes over the last five years, reaching 31.48 MT, the minister added. In response to a query from Rajya Sabha MP from Odisha, Muzibulla Khan, Varma said the steel sector is deregulated, with the govt providing a policy-friendly environment while companies must secure their own statutory approvals. Since Jan 2020, 34 environmental clearances have been granted, with approvals extending until July this year, the minister said. Replying to a joint question from MPs Harsh Mahajan and Dr Kavita Patidar, Varma said several initiatives like the implementation of domestically manufactured iron & steel products policy and the Production Linked Incentive (PLI) scheme for specialty steel, have been initiated to enhance domestic manufacturing, reduce imports and attract capital investments.
Time of India
4 hours ago
- Time of India
NCLT replaces RP in Anil Ambani personal guarantee case
The National Company Law Tribunal ( NCLT ) has replaced Jitender Kothari with Prashant Jain as the resolution professional (RP) in the insolvency case linked to Anil Ambani 's personal guarantee for a ₹1,385-crore loan extended by SBI to Reliance Communications , Times of India . According to the report, Ambani had extended the guarantee in September 2016, which was retrospectively tagged as a non-performing asset from late August that year. Kothari was appointed RP in August 2020 and subsequently sought information from Ambani, including details of proceedings in a UK court. Explore courses from Top Institutes in Please select course: Select a Course Category Product Management CXO healthcare Technology others PGDM MBA Digital Marketing Management Finance Public Policy Leadership Data Science Data Science Healthcare Others MCA Data Analytics Operations Management Project Management Design Thinking Degree Artificial Intelligence Skills you'll gain: Creating Effective Product Roadmap User Research & Translating it to Product Design Key Metrics via Product Analytics Hand-On Projects Using Cutting Edge Tools Duration: 12 Weeks Indian School of Business ISB Product Management Starts on May 14, 2024 Get Details Skills you'll gain: Product Strategy & Roadmapping User-Centric Product Design Agile Product Development Market Analysis & Product Launch Duration: 24 Weeks Indian School of Business Professional Certificate in Product Management Starts on Jun 26, 2024 Get Details Skills you'll gain: Product Strategy & Competitive Advantage Tactics Product Development Processes & Market Orientations Product Analytics & Data-Driven Decision Making Agile Development, Design Thinking, & Product Leadership Duration: 40 Weeks IIM Kozhikode Professional Certificate in Product Management Starts on Jun 26, 2024 Get Details The process triggered multiple legal challenges, including cases before the Delhi High Court and the Supreme Court. In May 2021, Kothari filed a report recommending admission of the insolvency plea, even as Ambani's counsel had requested additional time citing Covid-related travel restrictions. Soon after, Ambani's legal team argued that the RP was only entitled to seek information from SBI and accused him of seeking unrelated data. Ambani claimed that the RP was 'acting in undue haste and denying him fair and proper opportunity' to furnish information. The RP rejected these allegations. SBI, meanwhile, backed Kothari and said the prolonged pendency of the matter before the NCLT was delaying the resolution. Live Events In its July 15 order, as per TOI, the NCLT said, 'In light of Covid-related disruptions, Ambani should have been given a fair opportunity to provide information to the resolution professional.' It noted that 'the RP didn't even wait for adjudication of his application pending before this Tribunal seeking relaxation of 10 days' timeline and a cross application of the applicant before this Tribunal requiring more time in view of Covid restrictions.' While ruling out any misconduct, the bench said, 'Though, we do not find any negligence or explicit bias on part of the RP in this case, however, we are of considered view since the insolvency resolution process after commencement has to be run in close coordination of debtor and RP.'
Mint
10 hours ago
- Mint
Bulls and bears clash at 25,200: Will Nifty break free?
Indian stocks could see more volatility this week as the Nifty struggled to hold above the 25,200 level last week. This key resistance has triggered a battle between bulls and bears, amid heavy selling by foreign investors. Bears concluded four straight weeks of negative closing last Friday— the Nifty fell by 3.12% from 27 June to 24,837 on 25 July— with heavy open interest accumulating at the 23,900 strike Nifty call option expiring this Thursday. At closing on Friday, bears raised open positions— outstanding sell positions— of the 24,900 call by a whopping 962% to 86,159 contracts (one contract comprises 75 shares). "The sale shows that bears are confident, at least for now, of the market remaining below 24,900 by the end of this month," said Kruti Shah, quant analyst at Equirus. High levels of call selling reflects trader anticipation of further cuts in the market while heavy put selling indicates bullishness. Shah said that any downside after four weeks of an 800 point fall would be restricted to 24,500-24,600 levels, given the huge support by DIIs (domestic institutional investors). "Unless the market breaks the 25,200 resistance convincingly, it faces the prospect of a further cut to 24,500/600, which are strong supports," added Shah. Chandan Taparia, derivatives and technical head of research, Motilal Oswal added that the index has repeatedly failed to hold above this level. 'My range for now is 24,500 to 22,500," he said. Three failed attempts Since hitting a multi-month low of 21,743 on 7 April, the Nifty has gained 14% to 24,837. But it has failed three times to sustain above 25,200; each time falling sharply afterward. On 15 May, it jumped to 25,116.25 but fell 654 points to 24,462 by 22 May. It then bounced back 698 points to close at 25,160.1 on 9 June, only to slip again—this time by 687 points—to 24,473 on 13 June. A final recovery took the index to 25,669 on 30 June, but by last Friday it had fallen sharply once again by 832 points to 24,837. India lags global peers Indian markets have underperformed most global peers this year, amid tepid earnings growth and high valuations, forcing FPIs to press the sell button in favour of other emerging markets. For instance, while the MSCI India Index delivered a gross return of 6.55% in the calendar year through June, other major Asian markets fared better. The MSCI China Index returned 17.46%, MSCI Korea surged 39.69%, and MSCI Taiwan gained 10.43% during the same period, according to MSCI data. "FPIs are selling India in favour of other EMs as our earnings growth though better than expected doesn't justify the relatively high valuations," explained SK Joshi, consultant at Khambatta Securities. After net buying shares worth ₹8,467 crore in India's cash market last month, FPIs turned net sellers, offloading ₹20,263 crore worth of equities in the month through 24 July, National Securities Depository Ltd (NSDL) data showed. The reversal coincides with tepid earnings momentum—while standalone profits for the June quarter rose 22% year-on-year to ₹1.49 trillion, sequential growth was a mere 0.24%, according to Capitaline.
