Dixon Technologies Witnesses Strong Surge in Share Price with Positive Momentum

Dixon Technologies Witnesses Strong Surge in Share Price with Positive Momentum

VoM News Desk | December 21, 2023 | 01:15 PM IST | Breaking News | Follow on Google News

Dixon Technologies Witnesses Strong Surge in Share Price with Positive Momentum/mint

Dixon Technologies Witnesses Strong Surge in Share Price with Positive Momentum

On Thursday, Dixon Technologies experienced a more than 3% surge in its share price, driven by robust buying momentum. Over the past month, the stock has observed a substantial uptick of over 18%.

Year-to-date, Dixon Technologies shares have escalated by over 65%, and analysts anticipate further upward movement. This optimistic outlook is primarily attributed to the government’s emphasis on reducing IT hardware imports and Dixon Technologies’ recent collaboration with Lenovo, which is expected to fortify its position in IT manufacturing.

JM Financial has a ‘Buy’ rating on Dixon Technologies and has revised the target price for the stock to ₹7,215 per share from ₹5,975 previously. This upgraded target price suggests a potential upside of over 15% based on Wednesday’s closing price.

Dixon Technologies, via its subsidiary Padget Electronics, has inked a deal with Lenovo for the production of IT hardware products like laptops and tablets. Successful participation in the IT hardware PLI scheme 2.0 positions Dixon to cater to 10-15% of Lenovo’s volume in FY25, accounting for 19% of the laptop market share in India.

Anticipating IT Hardware revenues of ₹18-20 billion and ₹40-45 billion for FY25 and FY26 respectively, mainly attributed to Lenovo, Dixon Technologies has outlined a cumulative revenue projection of ₹480 billion over six years starting FY25.

JM Financial highlights Dixon’s successful scaling of its Mobile & EMS division (from ₹5.4 billion in FY20 to ₹46 billion in 1HFY24), indicating its capability to expand new business ventures. Government initiatives promoting local IT hardware manufacturing further bolster the company’s outlook.

JM Financial has adjusted its estimates based on Dixon’s higher guidance, resulting in a 2.4%/5.2% increase in FY25E/FY26E EPS. The brokerage has also revised the price target to 45x FY26E EPS from the earlier 45x Sept-25E EPS.

As of 12:20 pm, Dixon Technologies shares were trading at ₹6,443.25 apiece on the BSE, marking a 2.83% increase.

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