Buy Dixon Technologies; target of Rs 4500: Emkay Global Financial
Emkay Global Financial is bullish on Dixon Technologies has recommended buy rating on the stock with a target price of Rs 4500 in its research report dated May 28, 2021.
June 10, 2021 / 11:37 AM IST
Emkay Global Financial's report on Dixon Technologies
Q4 performance was in line with impact of commodity cost headwinds on ODM businesses (Lighting and Home appliances) and ESOP expense of Rs800mn. The TV business continued to see better product mix with higher demand for large screen sizes. Gross margins were impacted by the lag in passing on input costs to customers in ODM businesses and adverse revenue mix. Revenues from TV and Lighting in Q4 were marginally affected by components supply and demand moderation, respectively. Supported by a robust order book, the company continues to expand capacity in key segments. Management remains confident of achieving the upper ceiling of revenues under the Mobile PLI in FY22, and exports will also start in a few weeks.
LED monitor manufacturing and plans to participate in the RAC PLI adds to current growth levers. We incorporate revenues accruing from the PLI schemes and Refrigerator category into our estimates. Retain Buy with a revised TP of Rs4,500 (45x Sep'23E EPS).
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