Apr'25 View on Dixon Technologies (India) Ltd

Dixon Technologies (India) Limited, incorporated in 1993 , is a Electronic Manufacturing Services (EMS) company with operations in the electronic products vertical such as consumer electronics, lighting, home appliance, closed-circuit television cameras (CCTVs), and mobile phones. It also undertakes reverse logistics operations. Besides, it manufactures security surveillance equipment, wearables & audibles, AC-PCBs. Recently, it has entered a JV with Imagine Marketing Private Limited for designing and manufacturing wireless audio solutions in India. With strong run in the stock now facing strong resistance, we recommend sell due to following reaosns • Forging alliances across segments to strengthen market position. • Mobile and IT hardware to be key medium-term growth drivers. • Mobile: Increasing its mobile segment dominance with the Vivo partnership. • Component PLI: Ability to backward integrate remains key. • We expect earnings per share (EPS) to grow by 21.3% in FY26E and by 27.2% in FY27E. • We revise our FY25-27 estimates by 4-19% and fair value to Rs13,250. Positives: • Dixon to set to capture 40% market share of Indian smartphone by 2027. • Dixon to capture a large piece of India IT hardware manufacturing; onboarded four of five largest IT hardware brands. • Telecom business – potential to be a larger revenue contributor; Dixon well-placed to capture large market share. Negatives: • Mobile: Increasing competitive intensity from Tata Electronics remains a risk.