Dixon surges 13% in 2 days; hits new high on winning contract from Lenovo

The company's wholly-owned subsidiary, Padget Electronics, has won a contract from Lenovo to manufacture laptops and notebooks under the Production-Linked Incentive (PLI) 2.0 Scheme

Shares of Dixon Technologies (India) (Dixon) hit a new high of Rs 6,764 as they rallied 6 per cent on the BSE in Tuesday's intraday trade after the company's wholly-owned subsidiary Padget Electronics won a contract from Lenovo to manufacture laptops and notebooks under the Production-Linked Incentive (PLI) 2.0 Scheme.

In the past two days, the stock of the consumer electronics company has surged 13 per cent. Moreover, in the past one month, it has outperformed the market by gaining 28 per cent as compared to an 8-per cent rise in the S&P BSE Sensex. In the past nine months, the stock price of Dixon has zoomed 134 per cent.

In an exchange filing, Dixon said that Padget Electronics Private Limited, a wholly-owned subsidiary of the company, has been awarded manufacturing contract by Lenovo to manufacture IT Hardware products i.e. Laptops and Notebooks under Production Linked Incentive 2.0 Scheme (PLI), subject to signing of a definitive agreement in due course.

Dixon is among the largest home grown design-focused and solutions companies engaged in manufacturing products in the consumer durables, lighting, and mobile phones markets in India. Their diversified product portfolio include, consumer electronics like LED TVs; home appliances like washing machines; lighting products like LED bulbs and tubelights, downlighters; mobile phones; and CCTV & DVRs; Medical Equipment and wearables. Dixon also provides solutions in the reverse logistics i.e. repair and refurbishment services of LED TV panels.

Separately, Dixon has secured orders for 15 million units of Jio Bharat phones, the production of which started in September 2023.

The mobile phone manufacturing business was driven by strong domestic demand in Q2FY24. The company, however, expects a healthy export volume from its largest anchor customer ahead.

That apart, Dixon will also start the export of Nokia feature phones, which is likely to be a significant growth driver in the near- to medium-term. Given this, the company has a healthy FY24 order book from Motorola.

"Dixon's business model is highly scalable and profitable, with high fungibility in its products line. The company has captured a large market share across categories in the consumer electronics outsourcing space, much ahead of its peers. Technological upgradation in 5G infrastructure is poised to open new possibilities for electronic devices, especially in the mobility & communication segments," analysts at InCred Equities had said in the September quarter result update.