Dixon Technologies surges 19% on strong June quarter results

Shares of Dixon Technologies (India) surged 19 per cent to Rs 2,370 intra-day on the BSE on Wednesday after reporting a strong 85 per cent year-on-year (YoY) jump in consolidated net profit at Rs 24 crore in the April-June quarter (Q1FY20), on the back of healthy revenue growth. The consumer electronics company had a profit of Rs 13 crore in the year-ago quarter.

Operating income during the quarter grew 94 per cent at Rs 1,147 crore against Rs 593 crore in the corresponding quarter of previous fiscal. The healthy revenue growth was led by stellar growth in consumer electronics & lighting segment.

EBITDA (earnings before interest, taxes, depreciation, and amortization) margin remained unchanged at 4.6 per cent during the quarter. EBDITA margins and working capital improved, due to strong performance in the consumer electronics segment. Management expects this improvement to continue.

Analysts at Dolat Capital expect Dixon Technologies’ EPS to grow at a CAGR of 26 per cent over FY19-21E, given strong traction with key customers in its TV and lighting business. The mobile segment should also grow with addition of new customers.

“Management expects margins to further improve in the consumer electronics business and washing machines (WM), due to customer additions and higher volumes. Currently, the company fulfils 80 per cent of Xiaomi’s requirement of TVs, while its second-largest customer Panasonic has converted into ODM. Washing machines continue to be fully ODM, and Dixon is expanding capacity in WM for top loading FAWM and mobiles,” the brokerage firm said in result update.

At 02:40 pm, the stock was trading 17 per cent higher at Rs 2,322 on the BSE, as compared to 1 per cent rise in the S&P BSE Sensex. A combined 52,739 shares have changed hands on the counter on the NSE and BSE so far.