Dixon Tech stock drops 3% post Q1; brokerages see up to 10% upside

Dixon Tech Q1 results review: Dixon Tech reported its Q1FY27 results on Friday, delivering in-line performance for the April–June quarter (Q1FY27). The Electronics Manufacturing Services firm's earnings were supported by its mobile segment, while the home appliances business faced temporary margin pressure.

 

However, the EMS company's counter came under pressure on Monday. At 9:19 AM, Dixon Tech's share price was trading 2.49 per cent lower at ₹13,711 per share on NSE. In comparison, Nifty 50 was up 0.69 per cent at 24,552.25. In intraday trade, the stock declined 3.34 per cent to touch the day's low at ₹13,579 per share.

 

Dixon Tech Q1 results highlights:

 

• The company's revenue grew by 21.1 per cent from the same quarter last year to ₹15,548 crore from ₹12,835.66 crore in the year-ago period.
• Net profit for the quarter stood at ₹663 crore from ₹225 crore last year. (Profit spike aided by a sharp jump in other income, which stood at ₹528)
• Earnings Before Interest, Tax, Depreciation and Amortisation (Ebitda) for the quarter declined by 4.1 per cent from last year to ₹463 crore from ₹483 crore earlier.
• Ebitda margin during the quarter narrowed to 3 per cent from 3.8 per cent last year.

 

Brokerages’ view on Dixon Tech post Q1 Results

Nirmal Bang | Hold | Target ₹14,671

 

The brokerage noted that revenue was in line with its estimates at growing 21 per cent Y-o-Y, primarily driven by healthy growth across the mobile & EMS, home appliances, and consumer durables segments. 

 

Nirmal Bang highlighted that Dixon’s mobile segment delivered a resilient performance, supported by stable volumes and market share gains, despite a broader industry slowdown caused by elevated memory and component costs.

 

However, it noted that the home appliance business faced temporary margin pressure due to higher input costs, polymer price volatility, and forex movements, which are expected to normalize through cost pass-through measures and operational efficiencies.

 

Nirmal Bang said that "Dixon is at an inflexion point, with non-core/EMS-led growth since FY25 needing to convert into core profitability from FY28E onwards"

 

The brokerage maintained a "Hold" rating on Dixon with a revised target price of ₹14,671.

 

DAM Capital | Hold | Target ₹15,450

 

DAM Capital noted that Dixon reported a resilient performance amidst a challenging demand environment and supply chain challenges. "Volumes of 7.5mn in Q1 along with 20-25 per cent Q-o-Q growth in Q2 remain encouraging, giving comfort to our est of 43.5mn and 58.5mn in FY27 and FY28 estimates."

 

The brokerage also highlighted the company's efforts on deepening manufacturing in IT hardware, telecom, and potential entry into servers/data centres (optical transceivers) and precision manufacturing (industrial EMS) along with ODM solutions (TVs, refs, washers), noting that it remains encouraging. 

 

"Key monitorables over the next couple of quarters will be volume traction, progress in display/camera business and newer segments to gain confidence for earnings trajectory," it said.

 

The brokerage maintained "Buy" rating on Dixon with a target price of ₹15,450.

 

================================================