Dixon Technologies stock hits record high, up 200% on bullish run since February

Extending its winning streak for the fourth consecutive trading session on December 13, shares of Dixon Technologies (India) increased by 2%, crossing Crossed the 18,000 mark for the first time and created a new record 18,034 per share.

The company’s stock has been on a steady rise since February 2024, closing every month in positive territory and delivering excellent returns to its shareholders. During this period, the stock has risen The current trading price of is Rs 5,991 17,960, which is a remarkable gain of 200%.

This surge in stock performance reflects the rapid growth of the Indian EMS sector, which is emerging as a major manufacturing and export hub. The sector’s expansion is driven by favorable government policies, including the Production-Linked Incentive (PLI) Scheme and the Scheme to Promote Manufacturing of Electronic Components and Semiconductors (SPECS), coupled with India’s cost competitiveness, strong infrastructure and skilled labor force. Is.

The pace has been increased even further “China+1” StrategyWhich is enhancing India’s manufacturing capabilities on the global stage.

The company has recently roped in Google to manufacture its flagship premium phone brand, Google Pixel, and HP and Asus to manufacture its products locally. The IT hardware business is expected to be a key growth driver, as the top four global brands tie up with Dixon for laptop manufacturing.

Dixon has already started manufacturing for Acer. To meet the upcoming demand, Dixon has set up a plant in Chennai with a capacity of 2 million units, which will be operational by Q4FY2025. Dixon’s goal is revenue Rs 3,500-4,000 crore by FY2026. The total capital expenditure outlay for the Chennai unit is 150 crores.

According to domestic brokerage firm Sharekhan, the Indian electronics and consumer durables industry is worth 4,00,000 crores are being circulated. Manufacturing could be an important growth driver in the medium to long term perspective, offering huge opportunities due to the shift in manufacturing bases outside China and the government’s encouragement to scale up manufacturing through the Make in India initiative. PLI schemeThe objective of which is to kick-start the process with strong industry participation.

Company Outlook – Customer growth and margin expansion will be key growth catalysts

Sharekhan highlighted that Dixon’s leadership position gives it a significant advantage in the electronics outsourcing business. The brokerage also noted that the company’s Tirupati facility will accelerate growth by exploring new business verticals, expanding product offerings within existing verticals and increasing its presence in South India through partnerships with original equipment manufacturers (OEMs). Ready to play an important role in giving. Acquisition of new customers.

Expanded capacity in consumer electronics and home appliances, coupled with PLI scheme licensing for mobile phones, is likely to increase the pace of revenue growth. Meanwhile, margins may expand due to economies of scale and automation in the lighting business.

The brokerage also noted that the company is applying for PLI schemes in IT (laptops, tablets and hardware); Lighting (extrusion, batten, plastic and mechanical); AC components; and telecom (modems, routers and IoT devices), all of which bode well for long-term growth opportunities.

Amid strong growth levers, brokerage retains its ‘buy’ rating on Dixons with revised price target 18,800, modeling revenue and PAT CAGR of 53% and 69% over FY2024-FY2027E.

Disclaimer, The views and recommendations expressed in this article are those of the individual analysts. These do not represent the views of the Mint. We advise investors to check with certified experts before taking any investment decision.