The brokerage maintained its “buy” rating on the stock, with a price target of ₹14,500, following a meeting with the company’s management. The price target implies a 22% upside from Tuesday’s closing price of ₹11,920.
According to Investec, Dixon’s move of evaluating acquisitions to enter the speciality EMS business could diversify its portfolio beyond the bread-and-butter businesses of consumer electronics and mobile manufacturing.
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The brokerage also said that Dixon’s management remains confident of mobile phone volumes, excluding the proposed Vivo joint venture, remaining at least flat at around 33 million units in the current financial year.
It added that the company continues to expect regulatory approval for its proposed Vivo joint venture soon. Once operational, the venture is expected to add more than 20 million units of annual mobile phone volumes.
CNBC-TV18 had reported on Tuesday, citing sources with knowledge of the matter, that the Dixon-Vivo JV is inching closer to a final government approval, having been cleared by the inter-ministerial panel earlier this month.
Highlighting that mobile phone exports are likely to pick up in the current financial year and contribute an additional 4-5 million units, the management said that it expects a significant increase in exports starting in the financial year 2028, supported by the second phase of the Production Linked Incentive (PLI) scheme.
Beyond smartphones, Investec said Dixon’s IT hardware and telecom businesses remain on a strong growth trajectory. It expects ongoing backward integration initiatives to support margin expansion from FY28 onwards.
Shares of Dixon Technologies are trading little changed on Wednesday at ₹11,941. The stock has risen 4% so far in the last one month.
