International brokerage Jefferies downgraded electrical players Dixon Technologies (India) and Whirlpool of India to underperform, saying the durables segment is hypercompetitive, with higher price elasticity.
Over the past year, Dixon Tech shares have surged more than 150 percent in trade, leading to the counter trading at a valuation at FY25 PE of 73x. Jefferies' analysts have slashed the target price of the electronics manufacturer to Rs 5,920 from Rs 6,440.
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Whirlpool of India's operating profit margin (OPM) has declined to 5 percent in the nine months ended FY24 against 9-12 percent in FY15-21, the brokerage said. It reduced the target price for the home appliances manufacturer to Rs 1,125 from Rs 1,265 apiece.
On February 21, the promoter offloaded 24.7 percent equity in the company. According to exchange data, around 3.2 crore shares, or 24.9 percent equity, worth Rs 4,039 crore in Whirlpool of India changed hands at a price of Rs 1,280 a share.
Last week, Dixon Technologies signed a contract with Compal Smart contract for mobile phone manufacturing. The firm also announced the launch of a washing machine factory in Dehradun, Uttarakhand.
The unit is expected to generate employment opportunities for more than 1,000 people and have an annual production capacity of 24 lakh washing machines, the company said.
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