Sharekhan's research report on Dixon Technologies
Consolidated net earnings for Q2FY2024 beat estimates, led by a strong division mobile & EMS division performance. OPMs marginally lagged owing to weak margins in Lighting products. Expect the mobile & EMS division to sustain high growth momentum for FY2024 while Lighting remains affected by price erosion and market shrinkage. Consumer electronics to see marginal growth due to slow H1. The focus remains on sustaining high growth momentum through building capacities, investing in existing capabilities, diversifying into new categories, and cost optimisations through backward integrations.
Outlook
We maintain our Hold rating on Dixon Technologies with a revised PT of Rs. 5700 owing to rich valuation which factors high earnings growth trajectory over FY2023-FY2026E earnings.
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