Dixon hits 3-month high, stock rebounds 36% from April low; here's why

Dixon Technologies share price today: Shares of the country’s largest electronic manufacturing services (EMS) company Dixon Technologies (India) touched a three-month high of ₹16,795.80, surging 6 per cent on the BSE during Tuesday’s intraday trade amid heavy volumes. 

The stock was the biggest gainer in the BSE 200 index on Tuesday and ended the day with a 5.35 per cent rise. 

Dixon hit its 52-week high of ₹19,149.80 on December 17, 2024, and has recovered 36 per cent from a low of ₹12,326.60 it had hit on April 7.  

Among the major triggers for the stock are the Q4FY25 results, the components production-linked incentive (PLI) scheme and tie-ups for multiple components and segments. 

Further, amid tariff wars between the US and China, Dixon will be a major gainer of the gradual shift to India as a base for component manufacturing. This comes as consumer majors are on the lookout for alternative supply chains, away from China. 

During Q4, the company is expected to report the highest growth among listed EMS players. 

Krisha Zaveri of Systematix Research expects Dixon to post a 159 per cent jump in revenues over the year-ago quarter.

This is on the back of a 240 per cent year-on-year (Y-o-Y) jump in the mobiles segment, supported by a sequential ramp-up in volumes of Ismartu, a firm in which Dixon took a majority stake in July 2024, and gains in the refrigerator business. 

Margins in the lighting segment are expected to improve, aided by backward integration, said the brokerage.A medium-term trigger is the ₹23,000 crore PLI scheme. 

Kotak Institutional Equities expects Dixon to be a key beneficiary of the component PLI scheme. The company is ramping up its backward integration into display assembly, camera module assembly and mechanical components. The firm has also announced a joint venture with HKC of China for display assemblies, and more partnerships are expected for camera modules, mechanical components and die cuts. 

The company wants to more than double value addition to 40 per cent from the current 17-18 per cent and increase its profitability by 100-120 basis points (bps). It is expected to post an operating profit margin of 3.9 per cent in Q4FY25, and 3.8 per cent in FY25. 

The company’s 50 per cent joint venture with Signify (Philips Lighting) will also help arrest revenue decline in the LED lighting business. This is due to heightened competitive and pricing pressures. 

Analysts led by Deepak Krishnan of Kotak Institutional Equities, expect Dixon to gain from guaranteed volumes from one of India’s largest lighting brands, Signify. They also see it leveraging Signify’s technical expertise to expand commercial products and tap into export opportunities. 

Trends in the country’s smartphone sales will dictate its trajectory given that Dixon is the largest contract manufacturer of all major Android smartphones. India’s smartphone market contracted 8 per cent Y-o-Y to 32.4 million units during the January-March 2025 quarter (Q4FY25), according to reports. 

Xiaomi and Samsung saw steep shipment declines of 38 per cent and 23 per cent, respectively. Samsung shipped 5.1 million units, with its market share dipping to 16 per cent from 19 per cent year-on-year.  

On the other hand, Vivo extended its lead, with seven million units shipped and a 22 per cent market share. 

Further, Dixon is in the process of increasing value addition from 17-18 per cent to 35-37 per cent of the bill of material. This will support its revenue and profit trajectory, ICICI Securities said in a note.