Dixon Tech slips on profit booking after Finance Minister slashes import duty on mobile phones

Dixon Tech shares are down 14 percent in the past week.

Dixon Technologies tumbled around 7 percent from the day's high as investors booked profits in response to the Finance Minister Nirmala Sitharaman's decision to slash import duty on mobile phones, PCBA, and chargers to 15 percent.

At 1.27 pm, shares of Dixon Technologies were trading at Rs 10,951.10 on the NSE, after hitting a high of Rs 11,452.50.

Despite the adverse stock reaction, the development is seen as a welcome move by the India Cellular and Electronics Association (ICEA), which represents Apple, Foxconn, Dixon, Xiaomi, Oppo and Vivo, among others.

Pankaj Mohindroo, ICEA chairman, also told Moneycontrol, that the industry had reducing basic custom duty (BCD) on mobile phones, its PCBA and Charger/Adapter by 15 percent, which was accepted by the finance minister. "The mobile and electronics industry is elated with the announcements and will go a long way to enhance manufacturing, exports and competitiveness," Mohindroo said.

He also added that the move would also lower the prices of imported smartphones by 5-6 percent.

Faisal Kawoosa, an analyst at TecArc also stated that the move will further allow the smartphone value chain to work collaboratively towards making affordable 5G smartphones. "Since the launch of 5G smartphones, we have seen growth favouring premium segments. This opportunity is almost exhausted by now. We need to look at interventions that could help make 5G smartphones affordable," Kawoosa.