Shares of Dixon Technologies slipped over 8% in early deals today post Q3 earnings. The stock lost 8.50% to Rs 16,060 on BSE. Turnover was at Rs 7.45 crore as 4576 shares of the firm changed hands on BSE. Market cap of the firm fell to Rs 97,438 crore. However, Motilal Oswal assigned a buy call to the stock with a 17% upside. It fixed a price target of Rs 20,500 on the electronic goods stock.
PAT stood lower than our estimates on higher depreciation, interest, and minority interest, said the brokerage. This affected sentiment around the stock today.
Dixon Technologies (Dixon) reported better-than-expected revenue and EBITDA, driven by strong performance of the mobile and EMS segment, the brokerage said.
"The company is continuously focusing on increasing backward integration and expects display manufacturing to begin from 1Q/2QFY26. We expect incremental margin from the display facility to offset contraction in margins due to the PLI scheme ending by FY26. The company is also exploring entry into display fabs and is awaiting government guidelines from the expected component PLI scheme. We revise our estimates by -8%/-4%%/7% for FY25/FY26/FY27 to factor in higher mobile segment revenues and lower consumer electronics revenues and increase our DCF-based TP to Rs 20,500 on March’27 estimates. Reiterate BUY," added Motilal Oswal.
Global brokerage Jefferies maintained underperform rating on the stock with a target price of Rs 12,600.
Earnings beat expectations but risk-reward remains stretched at FY26 P/E of 106x, said the brokerage.
Dixon Tech is a non-branded B2B EMS player but trades higher than branded B2C companies. Its expects sales/PAT CAGR of 45%/49% over FY24- 27. The firm's operating margin is estimated to remain stable at 4%., said Jefferies.
Nuvama maintained its hold call on the stock but raised its price target.
Dixon reported another solid quarter with Q3FY25 revenue/EBITDA/PAT growth of 117%/112%/78%, largely led by a strong ramp up in the mobile segment (revenue/EBITDA up 190%/210% YoY), the brokerage said.
"We are revising FY25E/26E/27E PAT by -3%/5%/10% to reflect i) weaker performance in TV; ii) Vivo JV; and iii) full Ismartu consolidation (Q3 is the first full quarter). We roll forward valuation to Mar’26, yielding a TP of Rs 18,790 (earlier Rs 16400), based on 65x FY27E EPS; maintain ‘HOLD’ on fair valuation," said Nuvama.
Dixon Technologies reported a stellar set of earnings for the quarter ended December 2024. Net profit rose 124% year-on-year to Rs 217 crore. Profit in Q3 of last fiscal stood at Rs 97 crore.
Revenue rose 117% to Rs 10,461 crore in the December 2024 quarter. Dixon Technologies EBITDA more than doubled to Rs 398 crore in the October-December quarter.
Dixon Technologies (India) is the largest home-grown design-focused and solutions company engaged in contract manufacturing products in the consumer durables, lighting and mobile phones markets in India.