The brokerage firm Motilal Oswal has maintained a Buy rating to Dixon Technologies. According to the brokerage report, the target price is set at Rs 22,300, implying an upside of around 33% from current levels. The brokerage cites several structural and strategic strengths that could propel Dixon to new highs over the next year.
Let’s take a look at what the brokerage say on this stock –
Motilal Oswal on Dixon Technologies: Market positioning and first-mover advantage
The brokerage in its report noted that Dixon’s leadership in the smartphone EMS segment is a key driver of optimism.
“Our bias continues to remain positive on Dixon owing to its market leadership positioning, JVs with other players that ensure long term sustainability of volumes, backward integration and ability to scale up other segments such as telecom, IT hardware, refrigerator etc.,” added Motilal Oswal report.
With a 19% market share in smartphones in FY25, expected to rise to 40% by FY27, Dixon enjoys a first-mover advantage that gives it a head start over competitors in addressing 30–35% of the Bill of Materials (BoM) in the next 1–2 years.
Motilal Oswal on Dixon Technologies: Joint ventures and backward integration
Furthermore, the brokerage in its report noted the company’s strategy of expanding through joint ventures and also backward integration. This has been highlighted as a long-term growth engine for the company.
The brokerage report further noted the company is pursuing a 51% acquisition in Q-Tech India for camera modules and a potential 74:26 JV with Chongqing Yuhai Precision Manufacturing for precision components.
As per the brokerage report, “With these backward integration initiatives, we expect Dixon to generate mid-teens EBITDA margin in display and 7–9% in camera modules.” The commissioning of the display facility by Q1FY27 is also expected to strengthen its in-house capabilities.
Motilal Oswal on Dixon Technologies: Capitalising on export opportunities
Exports are another factor likely to boost Dixon’s growth. Electronic exports from India currently enjoy exemptions from US tariffs under Section 232, offering a potential advantage.
According to the brokerage, “Among its clients, Motorola has a potential to ramp up exports to US from India. However, the tariff scenario is still evolving and will be difficult to determine how overall exports of electronics from India to US will pan out.”
Motilal Oswal on Dixon Technologies: Revenue growth and margins outlook
The brokerage report projects strong financial performance over the next three years, with a CAGR of 36%/41%/46% in revenue/EBITDA/PAT over FY25–28. It also expects EBITDA margins to gradually expand with the ramp-up of backward integration projects.
“We revise our estimates to factor in higher mobile volumes and higher minority interest, and expect a CAGR of 36%/41%/46% in revenue/EBITDA/PAT over FY25–28,” the report noted.
Motilal Oswal on Dixon Technologies: Partnerships and client relationships
Dixon’s partnerships with global brands such as Motorola, Realme, Xiaomi, and pending JV approvals with Vivo provide the company with a strong client base.
The brokerage points out, “Dixon is already working with most of these brands on existing contracts…and has benefited from the growth in these brands despite overall market growth being sluggish.”
The brokerage reiterates its buy recommendation with a revised DCF-based target price of Rs 22,300.
Dixon Technologies share price
The share price of Dixon Technologies has surged 21% over the last six months, while on a yearly basis, the stock has delivered a return of 25%. On a year-to-date (YTD) basis, the share price has declined nearly 6%.
The company has a market capitalisation of Rs 1.01 lakh crore. Its 52-week high stands at Rs 19,148.90, while the 52-week low is Rs 12,022.
