According to reports from The Financial Express, brokerage house Nuvama has retained a 'Buy' rating on Dixon Technologies (India) with a target price of ₹11,700, implying an upside potential of around 15% from current market price. The brokerage expects the company to report a compound annual growth rate of 32% in revenue, 27% in EBITDA, and 22% in adjusted Profit After Tax between FY26-FY29. However, Nuvama has reduced earnings per share estimates for FY27, FY28 and FY29 by 6-8% due to weaker margin expectations and slower near-term demand. The brokerage has maintained its Price-to-Earnings (P/E) multiple at 55x for March 2027, noting that Dixon Technologies currently trades at a P/E of around 37-40x, significantly below its 10-year average of 90.99x.
As reported by The Financial Express, the Vivo joint venture approval remains one of the biggest potential triggers for Dixon Technologies. The partnership, announced in December 2024, is expected to add 20-22 million smartphone units annually to Dixon's capacity. Management reports they are 'very, very close' to government approval for this deal, with the joint venture expected to substantially increase manufacturing volumes. The mobile segment revenue increased 4% year-on-year, even though smartphone volumes remained lower than earlier expectations at 56 lakh units compared to the earlier guidance of 70 lakh units. Management expects volume growth to remain flat in FY27 excluding the Vivo joint venture.
According to Nuvama's report, Dixon Technologies is expanding beyond smartphones into five micro verticals and inorganic opportunities which could add revenue of ₹3,000 crore to ₹4,000 crore. The company is growing its IT hardware business to over ₹4,000 crore by FY27, including new facilities and SSD production. Additionally, Dixon subsidiary iSmartu is expected to begin feature phone and smartphone exports to Africa by Q2 FY27. The company is also exploring specialty electronic manufacturing services (EMS) in sectors such as aerospace, defense, medical, and industrial, aiming for ₹3,000-4,000 crore in revenue. A display module assembly unit, in partnership with HKC Corp, is expected to start trials in Q3 FY27 and full production in Q4 FY27, with target revenues of ₹5,500-6,000 crore.
As reported by The Financial Express, Dixon Technologies maintains a strong balance sheet with negative working capital days and net cash position of around ₹470 crore. As of March 2025, the company's debt-to-equity ratio was a low 0.07, with total debt at ₹13.9 billion and shareholder equity at ₹46.8 billion, meaning it is almost debt-free. The company holds substantial cash and short-term investments, totaling ₹6.4 billion, with a net cash position of ₹230 crore. Its Return on Equity (ROE) is between 28-37%, and Return on Capital Employed (ROCE) is about 42-45%. Despite this financial strength, the company faces margin pressures with EBITDA margins dropping to 3.9% in Q4 FY26, leading to a 36% year-on-year decline in net profit.
According to The Financial Express, Dixon Technologies faces near-term challenges from rising component costs, especially for memory and DRAM, squeezing smartphone manufacturing profit margins. The winding down of mobile Production Linked Incentive (PLI) benefits will also affect earnings, possibly reducing EBITDA margins by 50-70 basis points. Emkay Global has also lowered its FY27/28 EPS forecasts by 27-29%, anticipating fewer smartphone units and reduced PLI scheme benefits. The company trades at a P/E of around 37-40x, significantly below competitors like Amber Enterprises India (over 188x P/E) and Syrma SGS Technology (53-75x P/E). Goldman Sachs rates the stock a 'Sell', citing weaker performance and cautious mobile outlook due to high DRAM prices.
