On Thursday, Dixon Technologies India Ltd (DIXON:IN) stock received a Buy rating from Nomura/Instinet, with a price target set at INR 15,567.00. The firm underlined Dixon Technologies as a leading Indian Electronics Manufacturing Services (EMS) provider, noting its expansive product portfolio and growing customer base.
The company is recognized for manufacturing a significant portion of televisions, lighting, and semi-automatic washing machines within the Indian market, holding approximately 35%, 50%, and 30% shares respectively in these domestic segments.
Dixon Technologies has shown considerable growth in its mobile segment over the past three fiscal years, from FY22 to FY24, increasing its revenue contribution from around 24% to approximately 52%. This growth is attributed to acquiring new customers, effective execution, competitive conversion costs, and the distribution of production-linked incentive (PLI) benefits.
The firm also highlighted Dixon Technologies' strategic moves, including acquisitions and an Original Design Manufacturer (ODM) partnership with Longcheer in FY24. These initiatives are projected to fulfill over 30% of India's smartphone demand by FY27F. With Dixon's clientele making up more than half of the domestic mobile industry, there is potential for further expansion.
Additionally, Dixon Technologies' prospects may be bolstered by potential exports of mobile phones. The company has already started exporting to the United States through its partnership with Motorola (NYSE:MSI), and considering the large Total Addressable Market (TAM) for mobile phone exports, this could represent a significant growth avenue for Dixon.
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