Dixon Tech hits record high ahead of stock split; up 609% from Mar'20 low

The stock hit a record high of Rs 20,564, having gained 8% in the past three trading days, after the company fixed March 19, 2021 as the record date for 1:5 stock split

Shares of Dixon Technologies hit a record high of Rs 20,564, up 2.4 per cent on the BSE in the intra-day trade on Friday, having gained 8 per cent in the past three trading days, after the company fixed March 19, 2021 as the record date for 1:5 stock split i.e. from Rs 10 to Rs 2. The stock of the consumer electronics company surpassed its previous high of Rs 20,440 on February 25, 2021.

The firm's board of directors, at their meeting held on February 2, had approved the stock split. Dixon Technologies said the rationale behind the stock split is to encourage wider participation of small investors and to enhance the liquidity of the equity shares at the stock market.

The stock has zoomed 609 per cent from its 52-week low of Rs 2,899.95, touched on March 24, 2020. In comparison, the S&P BSE Sensex is up 102 per cent during the same period.

Dixon reported its highest ever quarterly revenue of Rs 2,180 crore in October-December quarter (Q3FY21), up 120 per cent year on year (YoY) on the back of improved consumer sentiment, festive season sales and strong order book.

"The growth outlook over the next few years remains robust led by mobile phone Production-Linked Incentive (PLI) revenue booking from 4QFY21 (with Motorola and Nokia as clients), value and volume growth in LED TV, international business opportunities in lighting, foray into new verticals (fully automatic top-load washing machine, set-top boxes, medical electronics, wearables) and further diversification prospects through upcoming PLI schemes (IT products like laptops and tablets)," analysts at Nirmal Bang Securities said in a Q3FY21 result update.

Led by the strong scale-up opportunities across multiple product categories, the brokerage firm expects 55 per cent earnings CAGR for Dixon over FY20-FY23E. Robust growth prospects, healthy return ratios, lean working capital cycle and high fixed-asset turnover will support Dixon’s valuation, it said.