Dixon Technologies hits new high; stock zooms 290% from March low

Shares of Dixon Technologies (India) rose 4 per cent and hit a new high of Rs 11,325 on the BSE on Thursday. The stock was trading higher for the fifth straight day.

In the past one week, the consumer electronics company's stock has rallied 12 per cent, against 1 per cent rise in the S&P BSE Sensex. It zoomed 291 per cent from its 52-week low of Rs 2,900, touched on March 24, 2020.

Dixon Technologies has operations in consumer electronics, lighting, home appliance, and mobile phone segments and also undertakes reverse logistics operations. Besides, the company undertakes manufacturing of security surveillance equipment through a JV company.

Despite the disruption in operations due to the Covid-19 pandemic-related lockdown, Dixon Technologies has witnessed strong recovery in business post easing of Covid-19-related curbs as reflected in the 17 per cent year-on-year growth in revenues along with an improvement in the operating profitability for the quarter ended September 2020 (Q2FY21).

On Tuesday, the company informed the stock exchanges that rating agency ICRA had, on November 23, 2020, revised the long-term rating and reaffirmed the short term rating as well as rating assigned to commercial paper instrument of the company. The outlook was revised to ‘stable’ from ‘positive’.

“The rating upgrade takes into account robust performance of Dixon Technologies in the recent past, as well as the expected significant increase in its scale of operations with the receipt of approval of its subsidiary’s application under the Production Linked Incentive (PLI) scheme by the Ministry of Electronics and Information and Technology (MeitY),” ICRA said in rating rationale.

The Stable outlook on the rating reflects ICRA’s expectation that the company will continue to report a healthy growth in its scale of operations, along with diversification in customer profile, product profile and supply chain, it said.