Dixon Technologies: Shift from devices to infrastructure

Dixon Technologies (NSE: DIXON) is India’s largest EMS company, making smartphones, TVs, washing machines, lighting, CCTVs, and wearables for Samsung, Motorola, and Xiaomi. In FY26, consolidated operating revenue was Rs 48,872.8 crore, up 25.8% YoY. What happened: FY26 reported net profit was Rs 1,438.6 crore (+31.3% YoY), but adjusted profit -- net of minority interest and non-recurring items -- was Rs 845 crore (+20% YoY). Smartphones remain the largest revenue contributor; telecom revenue is not separately disclosed. Two Q2 FY27 deals changed the picture: on September 30, Dixon signed an IP licensing agreement with Aviat Networks to locally manufacture microwave backhaul radios; on October 7, a 60:40 JV with Taiwan’s Gemtek to make optical transceivers for telecom networks and data centres. Why it matters: Dixon has been a consumer-side EMS player. Backhaul radios and optical transceivers are network infrastructure, not customer-premise equipment. India’s telecom equipment market is projected to grow from $25 Bn in FY25 to $50 Bn by FY32 (KPMG). Even a small share at the network layer would be far higher-margin than assembling phones. What I am watching: Q2 FY27 results for any telecom revenue disclosures, order ramp from the Gemtek JV, and whether adjusted profit growth holds above 20%. My stance: The headline profit flatters; Rs 845 crore adjusted is the number to track. The Aviat and Gemtek deals are early-stage but signal a deliberate move up the value chain into network hardware. At current valuations, the market prices in EMS growth; the upside requires these bets to generate meaningful revenue by FY28. I do not hold a position in Dixon Technologies at the time of writing. This is not investment advice.