Morgan Stanley downgrades Dixon Tech to 'Underweight'; share price falls 3%

Dixon Technologies share price today: Dixon Technologies share price was under pressure on Tuesday, July 1, 2025, with the stock dropping as much as 3.25 per cent to hit an intraday low of ₹14,465 per share. 

 

Around 9:35 AM, Dixon Technologies shares were trading 2.87 per cent lower at ₹14,521.70. In comparison, BSE Sensex was trading 0.24 per cent higher at 83,808.06 levels.  FOLLOW STOCK MARKET UPDATES TODAY LIVE 

Why did Dixon Technologies share price drop today?

 

Dixon Technologies’ share price came under pressure today after global brokerage Morgan Stanley downgraded the stock to ‘Underweight,’ even as it raised the target price to ₹11,563 per share. 

 

 

The downgrade reflects the brokerage’s concerns over intensifying competition in Dixon Technologies’ core electronics manufacturing services (EMS) business, especially with government incentives for the sector coming to an end.

 

According to reports, Morgan Stanley anticipates a marked slowdown in Dixon’s earnings growth. It projects a 46 per cent decline in EMS-related earnings during FY25–27, followed by a further 18 per cent drop in FY27–30.

 

While the company’s foray into component manufacturing is seen as a positive strategic step, the brokerage flagged execution challenges, citing dependence on technology tie-ups, regulatory approvals, and cost management.

 

Additionally, Dixon Technologies’ entry into display fabrication is seen as high risk due to the segment’s cyclical nature and its requirement for major capital and R&D investment, the brokerage said.   ALSO READ | Reliance Ind's solar leap prompts Nuvama's highest target price on D-Street

Nomura on Dixon Technologies

 

Nomura, in a note dated June 26, maintained a bullish view on Dixon Technologies, reiterating its ‘Buy’ rating. The brokerage also kept the target price unchanged at ₹21,409.

 

The brokerage said the Indian mobile electronic manufacturing services space is likely to be divided among key players such as Dixon, DBG Technology, Bhagwati, BYD, UTL Neolync, and Tata Electronics—with Dixon Technologies expected to command the largest share. It highlighted that partnerships with ODMs like Longcheer and equity stakes from customers like Vivo and Transsion reduce the risk of client churn. 

 

Additionally, the company’s diversification across clients helps mitigate the impact of weak demand from any single customer.

 

Nomura also flagged a sharp uptick in Dixon Technologies’ export sales during March–May 2025, which grew nearly fourfold. The surge, analysts said, is attributed to strong orders from Motorola and Transsion. 

 

With Motorola expected to shift a major portion of its US shipments from China to India due to tariff changes, Indian EMS players like Dixon Technologies stand to benefit. 

 

Supporting this, import data for Motorola mobile components into India showed a notable rise, with Dixon Technologies accounting for around 75 per cent of such imports in April–May 2025, slightly down from ~100 per cent earlier due to capacity constraints.

 

Dixon Technologies’ Motorola revenue has already surpassed previous monthly highs, and volumes are expected to grow further as new capacity goes live. 

 

Nomura projects Motorola volumes for Dixon Technologies to rise from around 11 million units in FY25 to 16 million in FY26 and 18 million in FY27. 

 

Overall, Nomura expects Dixon Technologies to manufacture approximately 45 million smartphones (excluding Vivo) in FY26 and 64 million in FY27. It believes mobile volume ramp-up, regulatory approvals, and new customer partnerships could serve as key catalysts for the stock going forward.  ALSO READ | Brokerages bullish on Nykaa's BPC growth, cautious on fashion outlook

 

About Dixon Technologies

 

Dixon Technologies, a homegrown manufacturing company, offers design-led solutions across a broad spectrum of categories including consumer durables, home appliances, lighting, mobile phones, and security devices. 

 

The company also provides comprehensive repair and refurbishment services for various products such as set-top boxes, mobile phones, and LED TV panels, catering to customers worldwide.