ICICI Securities research report on Dixon Technologies India
Dixon’s Q1FY24 performance was largely driven by growth in mobile and EMS divisions. Other segments reported revenue decline / flat revenues in line with slowdown in the white goods and durable market in India. Company has added new clients in its mobile business (Itel and Xiaomi). While customer addition offers revenue visibility, ramp-up is expected to be gradual. The weakness in other segments is expected to continue due to sluggish consumer sentiment. We reduce our FY25E EPS estimates by 18.4% to factor-in the Q1FY24 performance and weak market conditions.
Outlook
At current valuations of (58x FY25E EPS), risk/reward seems unfavourable to investors. Hence, we maintain REDUCE with a DCF-based target price of INR 3,600 (implied P/E of 58x FY25E EPS).
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