Emkay Global Financial's research report on Dixon Technologies
Dixon reported a robust quarter, beating Street/our estimates. While sales growth for 4QFY23 stood at 4% YoY, EBITDAM of 5.1% (vs 4% YoY) was the key positive, leading to EBITDA/PAT growth of 32%/28% YoY. Improvement in margin was supported by sales mix, operating leverage and strategic price hikes. On full-year basis, EBITDAM of 4.2% was up from 3.5% YoY, albeit below the 4.4% in FY21. While Management did not guide for any specific sales for FY24, it gave assurance that the group will be aggressive, along with its growth rates clocking much ahead of the industry’s. Mobile is expected to be the largest product in the portfolio, with addition of new clients; a large part of FY24 growth hinges on growth in this segment.
Outlook
We roll forward our valuation to Mar24E with new TP of Rs3,403, based on 35x (unchanged) P/E; retain HOLD.
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