DIXON

Forays into Li-ion Battery Manufacturing for Backward Integration

, a key manufacturing partner for electronics brands like Samsung, Xiaomi, and HP, has ventured into producing lithium-ion (Li-ion) batteries, battery packs, and modules. This move represents a strategic step toward backward integration and enhancing cost efficiency across its operations. → The company established a wholly owned subsidiary, Dixon Electrocorp, on September 29, 2025, specifically to manufacture and deal in various electronic products, including Li-ion batteries and related components. → This strategic direction is strongly enabled by the government's Electronic Component Manufacturing Scheme (ECMS), which offers incentives for the domestic production of Li-ion cells for digital applications (excluding storage and mobility). → The ECMS, launched in March 2025 with ₹22,919 crore in funding, aims to attract substantial investment and achieve self-reliance in the electronics supply chain. → This push into component manufacturing, including batteries, camera modules, and precision components, is viewed as the company's next major growth phase and a strategy to create a strong competitive 'moat'. → Dixon had executed a significant capital expenditure (capex) of nearly ₹900 crore in FY25 and projects a similar capex range of ₹900-1,000 crore for FY26, supported by adequate cash flows and credit lines. → Despite the long-term positive outlook, shares of Dixon Tech fell by over 3.5% on September 30, as investors and analysts awaited clearer details on the execution plan and project specifics of the battery manufacturing venture. → Looking ahead, the company aims to "further deepen" its manufacturing level by actively scouting for technology partnerships in precision components, camera modules, and battery packs, and also plans to set up a display fab facility.