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Dixon Tech Q1 beats estimates; analysts upbeat on mobile gains, JV strategy
The company reported a 95 per cent Y-o-Y growth in revenue and a doubling of net profit, beating most street estimates. While Ebitda margins were slightly down, analysts see strategic levers in place to support medium-term expansion.
Domestic brokerage Nuvama Institutional Equities noted that Dixon Technologies once again posted a strong quarter, with revenue, Ebitda, and PAT growth of 95 per cent, 95 per cent, and 68 per cent, respectively, each surpassing their estimates.
The strong show was led by a 125 per cent Y-o-Y jump in the mobile segment's revenue and 131 per cent Ebitda growth. The brokerage highlighted that Dixon Technologies retained its mobile volume guidance (42-43 million and 65-67 million units including the Vivo JV) and elaborated on component-related JVs. These include tie-ups for camera modules, enclosures, and precision components aimed at participation in the ECMS scheme. Track Stock Market LIVE Updates
While Nuvama acknowledged concerns about potential margin pressure in H1FY27 following the expiry of the PLI scheme in March 2026, it underscored management's confidence in achieving a 130-150 basis points (bps) margin expansion over the medium-term. It maintained a 'Hold' rating with a June 2026 target price of ₹16,100, citing fair valuation.
Motilal Oswal also highlighted the strong beat across revenue, Ebitda, and PAT, with the mobile segment again being the standout performer. The integration of Ismartu, improved exports, and higher client volumes drove robust growth. The brokerage stressed upon Dixon Technologies's two-pronged strategy, including strengthening client relationships through JVs and enhancing backward integration via component partnerships.
Motilal pointed to the company's strategic alliances – including a display facility with HKC, camera modules with Qtech, and precision components with Chongqing Yuhai – as key steps toward improving Dixon Technologies' margin profile and boosting customer stickiness. Additionally, the JV with Longcheer and Vivo is expected to provide incremental volume growth.
Factoring in the strong outlook, Motilal Oswal raised its FY27 estimates by 10 per cent and maintained a 'Buy' rating with a revised target price of ₹22,100 (₹20,500 earlier) based on DCF valuation.
Emkay Global echoed a similarly positive tone, noting that Dixon Technologies' revenue growth beat consensus estimates, led by strong performance in the mobile and EMS segments. The brokerage reaffirmed its confidence in Dixon's mobile volume guidance for FY26 and FY27 and highlighted the management's reiteration of 120-150bps margin expansion in the mobile vertical, despite PLI-related headwinds.
Emkay sees the company benefiting from scale, strong client relationships, and backward integration. The management's commentary on diversifying into PCBA for industrial and automotive applications was also seen as a positive trigger for Dixon Technologies' next phase of growth.
While Emkay slightly cut its DCF-based target price to ₹19,000 (to reflect minority interest from new and upcoming JVs), it maintained a 'Buy' rating, citing sustained competitive advantages and margin expansion drivers.
That said, while the impending expiry of mobile PLI benefits poses a risk to margins, brokerages remain optimistic about Dixon Technologies' growth trajectory. Strategic JVs, robust mobile volumes, and a clear focus on backward integration are seen as key enablers of long-term value creation.
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