Multibagger electronics stock turns ex-dividend, falls from record high; what's next?

Shares of multibagger Dixon Technologies hit their record high on Tuesday. The electronics stock also turned ex-dividend for a final dividend of Rs 5 per share today. The board of the company recommended a final dividend of Rs 5/- per equity share of the face value of Rs 2/- each for the financial year 2023-24. Also, the firm will hold its annual general meeting (AGM) on September 25, 2024. Thsi will be the 31st AGM of the company.

In Tuesday's trade, the stock hit its record high amid a flat domestic market. Dixon Technologies stock rose 0.59% intraday to a record of Rs 14,065 against the previous close of Rs 13,981 on BSE. The stock of the electronic goods contract manufacturer opened higher at Rs 13,999. Market cap of the consumer durables firm stood at Rs 82,514 crore. Total 4,793 shares of the firm changed hands over the counter amounting to a turnover of Rs 6.65 crore on BSE.

Later, the stock fell 1.61% to Rs 13,755 on BSE.  

In terms of technicals, the relative strength index (RSI) of Dixon Technologies stands at 68.6, signaling it's trading neither in the overbought nor in the oversold territory. Shares of Dixon Technologies are trading higher than the 10 day, 20 day, 30 day, 50 day, 100 day and 200 day moving averages.    

Motilal Oswal has maintained its bullish stance on the stock with a price target of Rs 15,500.

"Dixon Technologies’ (DIXON) recent tie-ups and MoU with HP and Asus for the production of PCs, notebooks, and laptops under IT hardware PLI 2.0 augur well for scaling up its IT hardware revenues from current levels. With these tie-ups, the company is now catering to 4 out of the top 5 players in laptops," said the brokerage.

"We also expect the company to continue benefiting from the new segments, backward integration, and the ODM mix improvement. We maintain our estimates and roll forward our target price to Rs 15,500 on Dec’26 estimates. Maintain BUY," added the brokerage.

Japanese brokerage firm Nomura has initiated coverage on the stock with a 'Buy' rating. It has assigned a target price of Rs 15,567 per share, citing benefits from localisation in mobiles and IT hardware.

Mentioning Dixon's significant business-to-consumer opportunities, the brokerage said that the company could capture over 30% of India's mobile industry by FY27, with additional growth expected from exports. The brokerage also mentioned Dixon's strong return on capital employed (ROCE) and its ability to maintain a premium valuation due to increasing backward integration.

On the other hand, in a report dated September 10, Kotak Institutional Equities assigned a sell rating to the stock with a fair value of Rs 7,330. 

"The potential addition of one more large customer as well as entry into the server market still remain key. However, with IT PLI requiring incremental backward integration each year, Dixon’s foray into IT hardware could potentially be return-dilutive over the short term and remains the key thing to watch out for. We raise our FY2026-27 estimates by 3-4% and FV to Rs 7,330 as we roll forward to September 2026E," said Kotak. 

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.