Dixon Technologies shares hit record high for second session, can they cross Rs 21,000 mark?

Dixon Technologies share price today: Shares of Dixon Technologies (India) Ltd crossed the Rs 19,000 mark for first time on Tuesday. Dixon Technologies stock gained 1.68% to a record high of Rs 19,149 on BSE. Market cap of the multibagger stock stood at Rs 1.13 lakh crore. 

Turnover rose to Rs 57.47 crore as 0.30 lakh shares of the firm changed hands on BSE. In terms of technicals, the relative strength index (RSI) of Dixon Technologies stands at 82.6, signaling it's trading in the overbought territory. Shares of Dixon Technologies are trading higher than the 5 day, 20 day, 30 day, 50 day, 100 day and 200 day moving averages. 

The multibagger stock has clocked stellar returns of 200% in a year and gained 194.13% in 2024. In two years, the stock is up 370%. 

The stock has gained nearly 7% this week after the electronic goods contract manufacturer said it has inked a a joint venture (JV) with Chinese smartphone maker Vivo to manufacture smartphones for Vivo as well as others. Dixon will have a majority stake in the joint venture, said the company.

It hit two consecutive record highs of Rs 18,874 on December 16 and Rs 19,149.80 on December 17 today.  

Brokerage Anand Rathi has assigned a price target of Rs 21,875 on the Dixon Tech stock.  

"The tie-up will enable the company to manufacture non-Vivo phones too, thus increasing capacity from the current 50m phones pa (40-45% of outsourcing opportunity). Post onboarding vivo, the company now has tie-ups with all major Android brands. We expect it to benefit from ongoing mobile manufacturing localisation tailwinds regardless of market share movement among brands. The good growth outlook and margin expansion should drive RoCE to 46.4% by FY27, from 28.2% now. We, thus, retain our Buy rating, with a higher target price of Rs 21,875," said Anand Rathi. 

Kushal Gandhi, Technical Analyst, StoxBox said, "Shares of Dixon displayed a strong primary trend, having surged 633% from its lows in February without experiencing any significant corrections, which underscores a robust primary uptrend. However, this rapid ascent has resulted in the Relative Strength Index (RSI) reaching extreme overbought levels, and the weekly RSI indicates a negative divergence relative to the price movement, suggesting a potential waning of price momentum. The price structure appears to be extended, trading at 13% above the mean, with no notable trends in volume activity. Consequently, we advise against making fresh purchases of the stock at this time."

A R Ramachandran, SEBI registered Independent analyst says, "Dixon Technologies stock price is bullish but also slightly overbought on the Daily charts with next resistance at 19460. Investors should be booking profits at current levels as a Daily close below support of 17955 could lead to target of 16600 in the near term."
 

Dixon Technologies reported a stellar set of earnings for the quarter ended September 2024. Net profit rose 265% year-on-year for the September 2024 quarter. Profit rose to Rs 412 crore on exceptional gain of Rs 209.6 crore and an increase in mobile phone production. Profit in Q2 of last fiscal stood at Rs 113.36 crore. Revenue rose 133% to Rs 11,534 crore in the July-September period compared to Rs 4,944 crore a year ago. Earnings before interest, tax, depreciation and amortization (EBIDTA) stood at Rs 420 crore, up 110 percent year-on-year.

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.