Sharekhan has given Buy recommendation for Dixon Technologies with a target price of Rs. 4960 in its research report issued on Sep 29, 2022
Sharekhan’s research report on Dixon Technologies
Strong manufacturing base across products, capacity expansion/volume growth in washing machines, LED TVs and security systems and new customer additions in mobile, washing machines and IT would drive revenues. Ramp-up of high margin original design manufacturer (ODM) products, liquidation of high-cost inventory, cost optimization and a fall in input prices, would improve profitability. Healthy balance sheet, low working capital and strong revenue/PAT CAGR of ~33%/~49% over FY22-25E justify its rich valuation.
We retain a Buy on Dixon Technologies (Dixon) with a revised PT of Rs. 4,960 given its leadership in outsourcing consumer electronics/ electronics manufacturing services (EMS) industry, approvals under PLI schemes, a diversified product mix and robust long-term growth outlook.