Dixon Technologies’ stock fell 10% to ₹15,806 per share in early morning trading on January 21. Although Jefferies advises ‘underperform’ at ₹12,600, Motilal Oswal maintains a ‘buy’ recommendation and raises the objective to ₹20,500.
Despite reporting excellent results for the December-ending quarter, Dixon Technologies’ stock fell 10% in early morning trading on Tuesday, January 21, to ₹15,806 per share as valuation worries caused the price to decline.
The business published better-than-expected December quarter (Q3FY25) results on Monday after market hours. Still, its net profit fell short of forecasts because of more significant depreciation, interest, and minority interest.
Its consolidated net profit increased by 77.5% year over year to ₹171.19 crore from ₹96.44 crore during the same period last year.
The combined net profit decreased 56% sequentially. Its consolidated income from operations increased by around 117% year over year to ₹10,453.68 crore from ₹4,818.25 crore in Q3FY24. Revenue decreased 9.4% sequentially.
Regarding operations, the company’s EBITDA (profits before interest, taxes, depreciation, and amortization) increased 113% yearly to ₹398 crore from ₹187 crore. The EBITDA margin was 3.7%, 100 basis points less than 3.8% in the same quarter of the prior year.
According to the sector performance, the Consumer Electronics & Appliances Division’s revenue declined by 32% yearly and by more than half from the September quarter to ₹633 crore.
This Division’s operational profit fell 31% year over year and 58% quarter over quarter to ₹22 crore. This category only comprised 6% of Dixon’s total sales this quarter, compared to 19% last year.
The Home Appliances segment’s revenue was ₹315 crore, down 29% from the September quarter but up 9% year over year. With sales of ₹201 crore, the Lighting Products category had a 14% sequential dip but a 7% year-over-year growth. Analyst opinions on the stock remained split after the company’s December financial results. In addition to increasing its target price to ₹20,500 per share, Motilal Oswal maintained its ‘buy’ rating on the company.
According to the brokerage, EMS (including mobile and IT hardware) and new markets like refrigerators, wearables, and telecom networking equipment will drive revenue growth. For FY25, FY26, and FY27, it anticipates an EBITDA margin of 3.7%, 3.8%, and 4.0%, fueled by further backward integration. Over FY24–FY27, this is anticipated to have a PAT CAGR of 60%.
However, Nuvama Institutional Equities increased its target price to ₹18,790 per share while maintaining its ‘hold’ recommendation on the company.
With a target price of ₹12,600 per share, international brokerage company Jefferies reaffirmed its “underperform” recommendation. Jefferies states that Dixon’s risk-reward ratio is 107 times FY26 price-to-earnings.
