Accumulate Dixon Technologies; target of Rs 17,500: Dolat Capital Market

Dolat Capital Market's research report on Dixon Technologies

Sales came in at Rs21.8bn mainly driven by growth of 199% YoY in consumer electronics and 114% YoY growth in mobiles segment. EBITDA grew by 95% YoY but margins were lower 60bps due to adverse material cost impact. PAT was also strong at Rs616mn. Dixon continues to remain the best play on PLI in India. Besides, it has multiple growth options including upcoming opportunities in electronic manufacturing, apart from mining existing customers/products. Strong customer addition, diversification and fungibility of manufacturing are its strength.

Outlook

We believe in Dixons capability, given its strong scale expansion focus, aggressive customer acquisitions and backward integration focus. We believe that the stock would be an attractive buy at a better valuation, and hence move to an Accumulate rating with a TP of Rs17500 valuing at 57x Sep22E.