Dixon Technologies gains 7% on getting approval for JV with HKC Overseas

Dixon Technologies shares gained 7 per cent in trade, logging an intra-day high at ₹10,501 per share on BSE. At 9:17 AM, Dixon Technologies share price was trading 5.54 per cent higher at ₹10,348.75 per share. In comparison, BSE Sensex was up 0.86 per cent at 78,233.13.   The buying on the counter came after Ministry of Electronics and Information Technology approved Dixon Tech's joint venture (JV) with HKC Overseas to manufacture display modules.  The joint venture will be set up in a 74:26 shareholding structure (Dixon:HKC) and will operate through a new entity, Dixon Display Technologies Private Limited (DDTPL). The JV will focus on the development, manufacturing, and distribution of liquid crystal display (LCD) modules and thin-film transistor LCD (TFT-LCD) modules, along with other display technologies.  

Meanwhile, Nomura has maintained a ‘Buy’ rating on Dixon Tech with a target price of ₹14,678, valuing the stock at around 45x FY28E earnings per share (EPS). It said the Press Note 3 approval, for a JV announced earlier, offers meaningful clarity on the planned ramp-up. The note highlighted HKC as a strong display partner that already caters to many of Dixon’s mobile customers globally and has a presence across IT hardware and TV displays.

 

Products and end markets

DDTPL’s products are expected to serve a wide set of industries, including smartphones, laptops, automotive displays, televisions, computer monitors, and industrial applications. The company said the partnership aims to strengthen India’s domestic capabilities in display-dependent categories, reduce reliance on imports, and support the component ecosystem aligned with the government’s ‘Make in India’ push.

Next steps for JV formation

Dixon said the JV’s establishment and HKC’s capital investment remain subject to fulfillment of other conditions under the share subscription agreement, in addition to the Press Note 3 clearance.

Plant timelines and investment

The brokerage said Dixon’s display plant construction is on track, with trials likely from Q2 FY27 and ramp-up expected in H2 FY27. Dixon is investing about ₹1,200 crore over a period for the project.

 

In Phase 1, the plant is expected to have capacity for about 24 million smartphone displays and 2 million laptop displays, with scope to scale up to about 55 million units later. Nomura added that the company’s plans to add automotive customers are not factored into current estimates.

Potential margin tailwind

Display module assembly—estimated at around 10 per cent of the bill of materials—typically carries double-digit margins, the brokerage said. It expects the display business could add roughly 50 basis points (bps) to Dixon’s overall margins by FY28, with potential upside to 100 bps at full ramp-up. Along with camera modules already in the ramp-up stage, higher component value addition is seen as a longer-term structural margin driver, it added.  Disclaimer: Views and recommendations are those of the brokerage/analyst and are not endorsements. Readers should exercise discretion.