Based in Noida, Dixon Technologies is a global electronic manufacturing firm. For businesses including Samsung, Xiaomi, Panasonic, and Philips, it produces televisions, washing machines, smartphones, LED bulbs, battens, downlighters, and CCTV security systems based on contracts. In India, it has 17 manufacturing facilities. Since its initial public offering in 2017, the business is listed on the BSE and NSE.
Dixon shares insights
- Compared to its three-year CAGR of 52.31%, the company’s yearly revenue growth improved by 65.91%.
- For Dixon Tech, Black Spinning Top was created.
- The stock returned 608.56% over three years, compared to 88.9% for the Nifty Midcap 100.
- Dixon Technologies (India score)’s category changed from Negative to Neutral over the last six months.
- The recent improvement in the Earnings and Price Momentum component scores was the leading cause of the change in the Average Score.
The Dixon share price has increased 25% in the past three months due to an improved forecast for margins and worldwide brokerage. Dixon is expected to achieve the most robust EPS growth at a 67% compound annual growth rate (CAGR) in FY 22-25, driven by 5 PLI upsides, new categories, and clients, according to the firm.
“Dixon shares might outperform the industry with a 40% CAGR in revenue. The FY22 AR demonstrates its substantial clientele,” the note said. The Dixon shareprice continues to have a Buy recommendation, with a target price of Rs. 5,305 per share. However, it identifies supply chain concerns, a slowdown in demand, market share loss for important clients, and a delay in cost pass-through as the main dangers.
“The Indian EMS market is anticipated to grow at a +30% CAGR over $36 billion in FY21 to $135 billion by FY26. India is quickly becoming a centre for low-cost manufacturing with expanding export potential. Dixon has five PLI approvals and leads the market. With a +40%/+67% CAGR over FY22–25, powered by PLI upside, new categories, and client additions, we anticipate Dixon to exceed industry growth. “It was fantastic.
Due to growth potential, Dixon Tech’s CAPEX is front-ended at 3.0-3.2 billion in FY23. These funds will be used chiefly for backward integration and new projects, with two years and four years of EBITDA payback times, respectively. The company aims to achieve pre-tax RoCE of 30% or more, post-tax RoE of 25%, and a dividend pay-out ratio of 20%.
The business anticipates strong volume growth of +24% YoY to 3.6 million units in FY23. Increased attention to ODM (5% currently) could aid in OPM growth to 2.6%–3.0% (2% currently). Dixon and Google struck a sub-licensing agreement in September 2022 for rights to Android and Google TV, which might help Dixon’s standing in the LED TV market.