Buy Dixon; target of Rs 5700: Edelweiss Securities

Edelweiss Securities' report on Dixon

We recently interacted with Mr Sunil Vachani, Executive Chairman at Dixon. Highlights: i) Penetration and imports substitution in categories wherein Dixon has presence offer huge growth potential, and Dixon aspires to be a top five global player in EMS by revenue and capability. ii) Management remains confident of attracting global/local partners that prioritise players with solid execution track record, cost edge, etc. Dixon’s sustainable returns-centric scale ambition reinforces confidence w.r.t. opportunity basket.

Outlook

Automation, migration to ODM (especially mobile phone), and a downstream component ecosystem are critical to its long-term revenue and competitive edge. Retain ‘BUY’.

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