Dixon Tech stock slips 4% on sluggish FY25 growth projection

Dixon Tech has been added to the MSCI Global Standard Index, and is projected to attract the highest passive inflows, estimated at $257 million.

Shares of Dixon Technologies fell around 4 percent after the company said that growth for FY25 will be slow due to its current ramp-up phase. The company indicated that the expected slowdown in growth is a result of ongoing adjustments and expansions.

The company targets a revenue of Rs 3,500 crore for FY25 and plans to reach Rs 48,000 crore over the next six years in the IT hardware segment. It is currently in discussions with two major global original equipment manufacturers (OEMs) regarding server contracts.

This strategic focus is part of Dixon Tech's broader growth plan, as outlined by company Vice Chairman and Managing Director Atul Lall.

Dixon Technologies' mobile segment is proving to be a major growth driver for the company, positioning it in a favourable spot within the market, said Lall in a conversation with CNBC TV-18. This segment is expected to contribute 70 percent of the company’s revenue for FY24-25.

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The margin profile for laptops and notebooks is similar to that of mobile devices, ranging between 3.5 and 4 percent, underscoring the significant role of the mobile segment in Dixon Tech's overall financial performance, Lall noted.

Dixon Tech has been added to the MSCI Global Standard Index, and is projected to attract the highest passive inflows, estimated at $257 million. Recently, UBS Principal Capital Asia Ltd. offloaded 6.86 lakh shares or 1.15 percent stake in Dixon Technologies for Rs 904.12 crore through open market transactions at Rs 13,178.47 apiece, according to the bulk deal data on the NSE.

At 10:21 am, Dixon shares were trading 3.8 percent lower at Rs 12,666.05 on the National Stock Exchange (NSE). The stock has gained around 96 percent so far this year, beating Nifty's returns of 16 percent. In the past 12 months, the counter has zoomed 147 percent, more than doubling investors' money. In comparison, Nifty rose 30 percent during this period.

According to Motilal Oswal, Dixon Tech stock is in a strong uptrend. It is trading above its short-term moving averages and the stock has been a huge performer within the midcap space, it noted recently.

The brokerage recommended investors buy the stock keeping stop loss below 12,650 levels on a closing basis for a new lifetime high target towards 14,250 zones.

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