Hold Dixon Technologies, target of Rs 3770: Sharekhan

Sharekhan's research report on Dixon Technologies

Consolidated Q3FY23 performance was below estimates as sales declined by 22% y-o-y. However, the margin improved y-o-y in all the segments. Net profit grew moderately by 12% y-o-y to Rs 52 crore. Management scaled down revenue target for FY23 due to slower growth in mobile division and low realization in TV segment. We see limited room for an upside from current price levels given expensive valuation post revenue and earnings downgrade. Although long-term prospects are bright, we await better entry point for investors.

Outlook

We downgrade Dixon Technologies (Dixon) from Buy to Hold with a revised PT of Rs 3,770 following muted Q3FY23 and a cut in revenue guidance for FY23/FY24.

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