Anand Rathi's research report on Dixon Technologies
The strong rise in Q3 FY20 volumes across categories like LED televisions (up 100%) and mobile phones (up 368%) was supported by a favourable government policy. Volume growth is expected to persist as the pace of customers added in all categories continues (eg, Nokia and Motorola added in Q3). PLI for LED bulbs would also be notified.
Outlook
Based on Dixon’s ability to cater to swelling demand without diluting its balance sheet, we raise our FY22e/23e over ~40% each and our target PE multiple from 40x to 50x. Our revised target now is Rs.19,578.
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