Domestic contract manufacturer Dixon Technologies’ revenue from operations is expected to have risen to around `18,000 crore in FY24, which is a near 50% year-on-year (YoY) growth, according to people in the know.
In FY23, the company’s revenue grew 14% YoY to Rs 12,192 crore.
A significant increase in the company’s revenue in FY24 can be largely attributed to growth in mobile and electronic manufacturing services (EMS) business. The company manufactures smartphones and feature phones for companies such as Xiaomi, Samsung, Motorola, Jio, itel, among others, at its four plants in Noida.
In the January-March quarter, the company’s revenue from operations is expected to have increased over 60% YoY to `4,900 crore.
Nearly half of the company’s annual revenue of `18,000 crore during the year is expected to have come from manufacturing and assembling mobile phones and their accessories, sources in the know said. During the year, Dixon added Xiaomi as its client for manufacturing and export of its mobile phones.
“Our ramp-up in Xiaomi’s smart business is in the range of around 300,000-400,000 a month…We expect the volumes to further build up starting April 2024,” Atul B Lall, vice chairman and MD at Dixon Technologies had said during the October-December quarter earnings call.
“So these are very large orders and we would undoubtedly be the largest phone manufacturer in the country,” Lall added. Besides Xiaomi, Dixon manufactures Motorola phones, of which over 20% is exported. Overall, the company has an annual capacity of 30 million smartphones and 50 million feature phones across four plants in Noida.
Dixon, which is also one of the beneficiaries under the smartphone and IT hardware production-linked incentive (PLI) scheme, tends to gain maximum from the government’s push to Chinese smartphone and hardware companies to involve local partners in the supply chain.
The company last week entered into a share purchase agreement to acquire a majority stake in Ismartu India, a manufacturing unit of Chinese phone maker Transsion Holdings, in two tranches. In the first tranche, Dixon will spend about `238.36 crore to acquire 13.8 million equity shares of face value of `10 each, representing a 50.10% stake in Ismartu India.
Industry executives said the company will soon announce another similar deal with a Chinese smartphone company.
“While Transsion Holdings has been a customer of Dixon, this development results in potentially higher assembly wallet share for Dixon and significantly improves confidence in this revenue growth opportunity panning out for Dixon over the next two years,” said HSBC Global Research in a recent note.
The brokerage expects Dixon’s revenue to more than double over the next two years and profit growth to be higher than revenue growth.
Across its categories of manufacturing products including smartphones, feature phones, LED bulbs, telecom products like routers and fixed wireless access devices, cameras, hearables, wearables, refrigerators, washing machines, home automation products, among others, Dixon manufactures about 1 million devices a day.
The company has 23 manufacturing plants across the country, and even exports to countries, like smartphones to US and lighting products to Middle East and Europe. The company is looking to set up manufacturing units globally as well, and also expects to start exports of telecom products soon, industry executives said.
Currently, about 10% of Dixon’s revenue comes from global markets, and in the next four to five years, Dixon expects to grow the share of revenue from global markets to 30%-40%.
The company is also working to come up with another facility in the next one year to manufacture smartphones and IT hardwares, which will be spread over an area of 1 million sq ft. The plant will have a capacity of about 50 million units covering smartphones as well as IT hardwares.