Sharekhan's research report on Dixon Technologies
Consolidated Q1FY24 performance was mixed as despite ~15% revenue growth, the company missed OPM estimates. Adjusted PAT growth was strong at 51% y-o-y. Management expects new customer additions, a robust order book in all key segments and scaling up of new verticals would drive growth. OPM are likely to expand owing to operating leverage, backward integration and an increase in revenue contribution through ODM solutions in consumer electronics and lighting segments.
Outlook
We have built-in revenue/earnings CAGR of 28%/42% (FY23-FY25E). We believe ramp up in its mobile division and traction in new verticals are the key growth catalysts. Currently, the stock trades at ~63x/~48x FY24/FY25E EPS. Given rich valuations, we continue to maintain Hold on Dixon with a revised PT of Rs 4,300.
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