Dixon Technologies: Strong prospects, high valuations

The company has negligible debt and positive cash flow helps it fund expansions

Dixon Technologies is an electronic manufacturing services (EMS) company, which makes consumer durables, lighting products and mobile phones for brands like Phillips, Panasonic and Gionee. 

About 78 per cent of its revenue comes from the original equipment manufacturers (OEM) business (supplies to big brands), while its original design manufacturing (ODM) business contributes the rest. In the ODM business, the company designs lighting products, light emitting diode televisions and semi-automatic washing machines.

The prospects for the company are strong, as the OEM/ODM sector, according to Frost and Sullivan, is expected to grow annually by 31 per cent over FY16-21. While OEM