Dixon Tech shares: Nomura sees 29% upside amid foray into camera modules

Nomura India has retained its 'Buy' rating on Dixon Technologies Ltd (Dixon Tech) with an unchanged target price of Rs 21,409, which suggests a potential upside of 29 per cent over the prevailing price. The rating was maintained, following the company's latest strategic moves to enhance backward integration and expand its value-add in electronics manufacturing. 

Dixon Tech has signed a binding term sheet to acquire a 51 per cent stake in Q Tech India, marking its foray into camera and fingerprint module manufacturing for mobile handsets, IoT systems, and automotive applications. The acquisition—comprising both primary and secondary investments—is subject to regulatory approvals and definitive agreements. According to Nomura India, this investment positions Dixon Tech to strengthen its play in high-value components and broaden its exposure in the electronics ecosystem.

On Wednesday, Dixon Tech share price stood at Rs 16,319.35, up 3.17 per cent.

Precision components segment
In parallel, Dixon Tech has entered a 74 per cent joint venture with Chongqing to manufacture precision mechanical and metal components for products such as laptops, smartphones, IoT devices, and vehicles. Together, these steps signal a significant deepening of its component capabilities.

Nomura views the Q Tech investment as attractive, citing the company’s established global presence in camera modules (including >32MP and OIS/periscope variants), with key clients like Vivo, Oppo, and Xiaomi. Q Tech India reported Rs 2,400 crore in revenue and a 5.8 per cent Ebitda margin in FY24. Nomura estimated that with Dixon’s support, the addressable market could grow from 1.5 crore to 5–6 crore phones, with room for margin expansion under the government’s PLI scheme.

Earnings Impact 
Nomura estimates the Q Tech acquisition alone could add over 5 per cent to Dixon’s EPS by FY28F, depending on ramp-up. Combined with the precision component JV and the previously announced display module assembly with HKC, these initiatives could allow Dixon Tech to address up to 30 per cent of the bill of materials (BoM) for smartphones and laptops—up from just 8–10 per cent currently. This shift is seen as enhancing customer stickiness and expanding Dixon’s competitive moat.

Nomura maintains a ‘Buy’ rating on Dixon Technologies, projecting robust earnings potential and structural growth drivers from its expanded component strategy.